Preamble

The House met at a Quarter before Three of the Clock,  Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Private Bills [Lords] (Standing Orders not previously inquired into complied with).

Mr. SPEAKER laid upon the Table report from one of the Examiners of Petitions for Private Bills, That in the ease of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:

Wimbledon Corporation Bill [Lords].
Rugby Corporation Bill [Lords].
Dover Harbour Bill [Lords].
Worksop Corporation Bill [Lords].
Colne Corporation Bill [Lords].
Amersham, Beaconsfield, and District Water Bill [Lords].

Bills to be read a Second time.

Sidmouth Urban District Council Bill. As amended, considered; to be read the Third time.

MARRIAGES PROVISIONAL ORDERS BILL,

"to confirm certain Provisional Orders made by one of His Majesty's Principal Secretaries of State under the Marriages Validity (Provisional Orders) Acts, 1905 and 1924," presented by Mr. Hacking; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 99.]

NATIVE LANDS, KENYA.

Sir ROBERT HAMILTON: I desire to present a petition to this Honourable House. The petition is signed by 17 Africans, British subjects residing in the North Kavirondo reserve in Kenya Colony. The petitioners state that, the Native Land Trust Ordinance which was intended to secure their lands for ever, having been amended without the con-
sent of the native authority, they have grave cause for anxiety as to the future as money cannot compensate them fully for lands taken. The petitioners ask that prospecting for gold may be undertaken by the Government rather than by individual prospectors, whose arrival in numbers has greatly disturbed their social life. They are further apprehensive of the introduction into the reserve of European laws, particularly that requiring Africans to carry registration badges. The petitioners therefore pray that the pledges given in respect of their land may be safeguarded and that this Honourable House will preserve an open mind and show abounding sympathy in the consideration of their case.

Oral Answers to Questions — COAL INDUSTRY.

EXPORTS (GERMANY).

Mr. JOHN: 1.
asked the Secretary for Mines if he will make available to the House the statistical agreement between British and German coal experts as to the average export of British coal into the German customs area for the first eight months of 1931 and the 20 months beginning 1st January, 1930?

The SECRETARY for MINES (Mr. Ernest Brown): In accordance with the promise I gave during the Debate on Thursday last, I will circulate in the OFFICIAL REPORT a copy of the letters in identical terms exchanged on 13th January last between the Mines Department and the German Ministry for Trade and Industry, after long investigations. In these it is agreed that during the period January, 1930, to August, 1931, inclusive, the average monthly imports of United Kingdom coal into the German Customs Area were 295,600 metric tons, including coke, coke being equal to coal, ton for ton. During the period January, 1931, to August, 1931, inclusive, the corresponding average monthly import figure was 246,367 metric tons.

Following is a copy of the letter from the Mines Department dated 13th January, 1933, to the German Ministry for Trade and Industry, Berlin:
As a result of the conversations which have taken place between us in London on 12th and 13th January, the United Kingdom and German coal experts agreed that the German statistical figures, namely, those of the Reich Coal Controller, should be the basis of the following statements because the United Kingdom statistics do not show the United Kingdom coal exports to Germany via Holland.

It was established that:

(1) During the period January, 1930, to August, 1931, inclusive, the average monthly imports of United Kingdom coal into the German Customs Area were 295,600 metric tons, including coke, coke being equal to coal, ton for ton.
(2) During the period January, 1931, to August, 1931, inclusive, the corresponding average monthly import figure was 246,367 metric tons.

If it is desired to ascertain the total imports of United Kingdom coal and coke into Germany, there must be added to the above figures those quantities imported into the Free Harbour area and those used for German and foreign bunkers. These imports, which it has not been possible to ascertain accurately for an earlier period, were for the first 11 months of 1932 at the rate of 81,000 tons per month.

The German coal offer of 21st December, 1932, refers only to imports into the German Customs Area, the remaining imports not being subject to the control of the Reich Coal Controller."

Captain PETER MACDONALD: 3.
asked the Secretary for Mines the approximate tonnage of coal exported to Germany in 1930, 1931 and 1932, respectively, for bunker and other purposes outside the Customs area; and whether he is satisfied that the increased competition for this market which may follow the conclusion of the Anglo-German trade agreement will not result in any reduction of the proportion of British coal purchased for such purposes?

Mr. BROWN: The quantities of United Kingdom coal and coke imported into the free harbour area in Germany and those used for German and foreign bunkers were, for the first 11 months of 1932, at the rate of 81,000 tons per month. No accurate ascertainment for an earlier period is available. The answer to the second part of the question is in the affirmative, but my hon. Friend may rest assured that the position will be closely watched as we anticipated in signing the agreement that we should secure an increase in our total sales of coal and coke to Germany of at least 80,000 tons a month.

Mr. GODFREY NICHOLSON: In the event of the proportion of British coal imported into these areas showing a reduction, what steps will be taken by His Majesty's Government?

Mr. BROWN: In that case, I would remind the hon. Member that three months' notice only is required to terminate the agreement.

Mr. LAWSON: May we take it that the hon. Gentleman rather anticipates a danger of a reduction in the amount exported for bunker purposes?

Mr. BROWN: The hon. Gentleman must take what I have said in answer to the question put to me. I am not responsible for the question, but only for the answer.

AUTOMATIC GAS DETECTORS.

Mr. T. WILLIAMS: 2.
asked the Secretary for Mines whether all the tests on automatic gas detectors have been concluded; whether he has yet received reports; and whether copies have been supplied to the Miners' Federation and the producing firms?

Mr. E. BROWN: The trials of the Ringrose Alarm at Mosley Common, Houghton Main and Waun Llwyd Collieries have been concluded. I have received reports from the committees responsible for the two first-mentioned, and I hope to receive the third report in the course of the next week or two. I will decide in what way the reports will be published when I have had an opportunity of considering all three of them together.

Mr. WILLIAMS: Will the Miners' Federation of Great Britain and the producing firms be supplied with copies; and is it the hon. Gentleman's intention to discuss the question with the Miners' Federation and the other parties concerned before the publication of the reports?

Mr. BROWN: I think it would be much better for all parties concerned if the three reports were considered together. Perhaps the hon. Member will put down a question later, and I will then decide the particular form in which all parties concerned can best be informed of the results.

Oral Answers to Questions — TRADE AND COMMERCE.

EMPIRE MARKETING BOARD.

Mr. LOUIS SMITH: 4.
asked the Secretary of State for Dominion Affairs if he can now make any statement as to the future of the Empire Marketing Board?

The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): I am not in a position to add to the answer which I gave on 3rd May to a similar question addressed to me by the hon. and gallant Member for Blackpool (Captain Erskine-Bolst) of which I am sending a copy to the hon. Member.

Mr. SMITH: Having regard to the far-reaching effects of the Ottawa Agreements, will the right hon. Gentleman say whether certain activities of the Empire Marketing Board may now be considered redundant; and whether some economy may not be made?

Mr. THOMAS: The hon. Member could not have followed the details of the Budget or he would have observed that there was no provision for the Empire Marketing Board.

Mr. HANNON: May I ask whether the work of this board in the past has not been very valuable to the whole of our Imperial trade; and what does the right hon. Gentleman propose in place of the board?

Mr. THOMAS: I not only think that it has been of considerable advantage to the Empire, but at Ottawa I intimated on behalf of the Government that we were prepared to continue its functions until September. We urged its continuance, but the Dominions took a different view.

Sir HERBERT SAMUEL: Does the right hon. Gentleman's supplementary answers mean that the Empire Marketing Board is to be discontinued?

Mr. THOMAS: No. The supplementary answers indicate that the committee, of which the right hon. Gentleman will be aware, which is considering the whole question, do not recommend in their report the continuance of the board, but the whole report is now a matter for consideration by the Government.

Mr. MANDER: Did not the May Committee also recommend that the board
should be abolished on the ground of economy?

Mr. THOMAS: There have been many things since the May Report.

OTTAWA AGREEMENTS (CANADA).

Mr. MANDER: 5.
asked the Secretary of State for Dominion Affairs if he is now in a position to state if the Canadian tariff board have yet some to a decision regarding the commodities which it has been asked by His Majesty's Government to review under Article 13 of the Ottawa Trade Agreement?

Mr. J. H. THOMAS: I would refer the hon. Member to the reply which I gave to a similar question by the hon. Member for Birkenhead East (Mr. White) on 2nd May. The Canadian Tariff Board took up its duties on 1st May only, and has not yet, I understand, considered the matters referred to by the hon. Member.

Mr. GRAHAM WHITE: Is it the right hon. Gentleman's intention to make any representations in this matter, having regard to the fact that the undertaking in the agreement was that the tariff board should be set up forthwith and that there has been a lapse of nine months?

Mr. THOMAS: The hon. Member apparently misunderstands the situation. Representations on the matters to be considered by the tariff board have already been made, and the tariff board sat on 1st May. Obviously, if they are considering these representations, and the case presented by the British manufacturers, it would be unwise for me to go into it at this stage.

DAIRY MACHINERY (DANISH IMPORTS).

Captain HEILGERS: 6.
asked the President of the Board. of Trade the value of the imports from Denmark of dairy machinery of the description specified in the Danish Agreement during the years 1930, 1931 and 1932?

The PRESIDENT of the BOARD of TRADE (Mr. Runciman): The precise information desired by my hon. and gallant Friend is not, available, but the total declared value of the imports into this country of all descriptions of dairy machinery and parts thereof registered during the years 1930, 1931 and 1932, as
consigned from Denmark (including the Faröe Islands) was £33,406, £36,396 and £25,363, respectively.

Mr. HANNON: Is it a fact that a considerable amount of this dairy machinery which is imported from Scandinavia could be made in this country, if proper encouragement were given to our home manufacturers?

UNITED STATES (IMPORT DUTIES).

Mr. GRANVILLE GIBSON: 7.
asked the President of the Board of Trade whether, in view of the fact that the United States of America have increased the duties on imported leathers from 15 per cent. to 30 per cent. ad valorem, he will say whether duties have been increased since 1st April on any other kinds of manufactured goods imported from this country; and, if so, to what extent?

Mr. RUNCIMAN: I understand that by a recent Customs decision certain classes of leather formerly dutiable at lower rates are now regarded as subject to duty at 30 per cent. ad valorem under paragraph 1530 (d) of the United States Tariff. The increase of duty results solely from a change in the interpretation of the tariff, and not from any change in the tariff itself. Such interpretations, which are decided by a judicial procedure and may involve either reductions or increases of duty, are issued frequently, but I have no details of any other such changes since 1st April.

Mr. GIBSON: Is the right hon. Gentleman aware that this increase of 15 per cent. took place on the very day that the proposed tariff truce was announced; and will he make strong representations that this increase is not consistent with the spirit of the proposed tariff truce?

Mr. RUNCIMAN: I was not aware that it had been announced on that day, but certainly it would be contrary to anything in the nature of a tariff truce to alter the tariff after the truce had been declared.

Mr. T. WILLIAMS: But is the right hon. Gentleman not aware that the hon. Member is an ardent supporter of protection and tariffs?

GERMAN EXPORTS (CURRENCY REGULATIONS).

Mr. HERBERT WILLIAMS: 8.
asked the President of the Board of Trade if his attention has been drawn to the currency regulations issued on 1st March by the German Ministry of Trade, whereby German exporters are enabled to quote very low prices for German goods because of the provision whereby they are permitted to recoup themselves by using 60 per cent. of the foreign currency in which they are paid for the purchase of German bonds in London and New York, and their subsequent sale in Germany on terms which afford them a large profit; and what action he proposes to take to protect British interests?

Mr. RUNCIMAN: Under the German regulations for controlling foreign exchange, permission has for some time past been obtainable in special cases to employ part of the proceeds of exports in the manner indicated in the question, and I understand that the conditions applicable were somewhat modified at the beginning of March. The position is being carefully watched.

JAPAN.

Mr. CHORLTON: 9.
asked the President of the Board of Trade if, before any invitation to a joint conference is issued by His Majesty's Government to the representatives of Japan, he will consult all the cotton and other trade interests concerned in this country?

Mr. RUNCIMAN: As I explained to the House last Tuesday, I have asked the Japanese Ambassador to put certain suggestions before His Government and I am now awaiting his reply. I can assure my hon. Friend that I shall not fail to consult fully at all stages the cotton and other trade interests concerned.

WEST AFRICA AND JAPAN.

Mr. CHORLTON: 10.
asked the President of the Board of Trade if he is yet able to announce any action with respect to the West African Colonies and the Anglo-Japanese treaty?

Mr. RUNCIMAN: I hope to be able to make a statement in the course of the next few days.

SUEZ CANAL (CHARGES).

Mr. RANKIN: 11.
asked the President of the Board of Trade whether he is now
in a position to make a further statement in respect to an international review of the question of the Suez Canal charges?

Mr. RUNCIMAN: No, Sir. I can add nothing to my answer of 23rd March.

TRADE AGREEMENTS AND NEGOTIATIONS.

Mr. LYONS: 13.
asked the President of the Board of Trade whether, in the terms of any new trading agreement, he will reserve to this country the right to alter any concession in the event of a foreign contracting country depreciating its currency during the operation of the agreement?

Mr. RUNCIMAN: I cannot now anticipate what provision it may be necessary to include in any future trade agreements entered into by His Majesty's Government, but I have noted my hon. Friend's suggestion.

Mr. ANSTRUTHER-GRAY: 23.
asked the President of the Board of Trade how many trade treaties containing most-favoured-nation clauses that could not be denounced within six months are now in existence, and with what countries?

Mr. RUNCIMAN: I will circulate a list in the OFFICIAL REPORT.

Following is the list:

COUNTRIES with which commercial treaties are in force containing provisions for the mutual accord of most-favoured-nation treatment, and which could not be denounced within six months.

Country and when Terminable.

Argentina—No time fixed.
Austria—11th February, 1935, or thereafter. on 12 months' notice.
Bolivia—After 12 months' notice.
Brazil—11th September, 1934, or thereafter, on six months' notice.
China—No time fixed.
Colombia—After twelve months' notice.
Czechoslovakia—After 12 months' notice.
Denmark—No time fixed.
Egypt-16th February, 1934.
Estonia—After one year's notice.
Germany—After one year's notice.
Greece—After one year's notice.
Guatemala—After one year's notice.
Hungary—26th July, 1937, or thereafter, on one year's notice.
Iceland—No time fixed.
Italy—After one year's notice.
Japan—On 12 months' notice.
Latvia—After 12 months' notice.
Netherlands—After 12 months' notice.
Nicaragua—After one year's notice.
Norway—After 12 months' notice.
Panama—8th April, 1939, or thereafter, on one year's notice.
1346
Persia—Provisionally in force. When ratified it will be possible to terminate this Treaty on 10th May, 1936, or thereafter, after six months' notice.
Portugal—After one year's notice.
Rumania—12th May, 1934, or thereafter, after six months' notice.
Siam—30th March, 1936, or thereafter, after 12 months' notice.
Sweden—After 12 months' notice.
Switzerland—After 12 months' notice.
Turkey—3rd September, 1935, or there-after, on 12 months' notice.
U.S.A.—After 12 months' notice.
Venezuela—No time fixed.
Yugoslavia—After one year's notice.

DENMARK (BRITISH TYPEWRITERS).

Mr. LYONS: 14.
asked the President of the Board of Trade what quota restriction is imposed by Denmark upon the importation there of British typewriters; whether any similar quota is imposed on foreign typewriters; whether either quota has been altered in any way during the preceding 12 months and to what effect; and whether any alteration will take place by the terms of the proposed trading agreement?

Mr. RUNCIMAN: The Danish import control regulations do not involve the allocation of definite quotas to the various supplying countries.

FRANCE.

Captain DOWER: 15.
asked the President of the Board of Trade if he can now state what has been the result of the representations made by him to the French Government with regard to tariff discrimination against this country as compared with Belgium so far as importation into France of hat leathers is concerned?

Mr. RUNCIMAN: A Bill has been introduced in the French Legislature to give the French Government power in certain circumstances to reduce the import turnover taxes on foreign goods to their former level. This would, I understand, enable the French Government to reduce the import taxes on United Kingdom goods to 2 per cent.—the rate at present applicable to Belgian goods.

Mr. O'CONNOR: 18.
asked the President of the Board of Trade whether he has yet received any reply from the French Government to his representations on the subject of the French discriminatory surtax of 15 per cent. levied on British imports into France; and what is the nature of the reply, if any?

Mr. RUNCIMAN: I have at present nothing to add to my replies to previous questions on this subject, but the matter is being pursued.

Mr. O'CONNOR: In view of the recognition that the present treatment by France of this country is incompatible with the most-favoured-nation treatment, will the right hon. Gentleman consider using his powers under the Import Duties Act by way of retaliation;

Mr. RUNCIMAN: We have considered what has been done and the necessary representations have been made, and I hope that they may be fruitful.

Mr. O'CONNOR: Will the right hon. Gentleman bear in mind that it is now a considerable time since those representations were made and that apparently France has done nothing at all?

Mr. H. WILLIAMS: As we have no most-favoured-nation treaty with France are we not free to discriminate against them?

Sir PERCY HARRIS: Is not the inevitable result of the Government's tariff policy that retaliation leads to retaliation?

SPAIN.

Mr. O'CONNOR: 17.
asked the President of the Board of Trade whether in view of the adverse trade balance which exists between Great Britain and Spain, he proposes to give notice to terminate the existing trade agreement with Spain and to negotiate another which will be more favourable to Great Britain?

Mr. RUNCIMAN: Denunciation of the existing commercial treaty with Spain, which secures various benefits to United Kingdom goods in Spain, is not a necessary preliminary to further commercial negotiations between the two countries. The possibility of initiating such negotiations at a favourable opportunity will be borne in mind, but I cannot at present say how soon such an opportunity is likely to arise.

Mr. G. NICHOLSON: Is the right hon. Gentleman aware of the grave disability which the coal export trade of this country suffers with regard to trade with Spain?

Mr. RUNCIMAN: That does not arise out of this question.

CHINA (CUSTOMS REGULATIONS).

Mr. NUNN: 24.
asked the President of the Board of Trade whether he has considered the memorandum issued by the Shanghai customs house, and published on 21st March, entitled "Amplification of the regulations governing the marking of foreign goods with the country of origin"; and whether he proposes to consult the British industries concerned as to the practical difficulties in the way of complying with the regulations of the Chinese customs?

Mr. RUNCIMAN: The answer to the first part of the question is in the affirmative. As regards the second part, I have received representations on this subject from the London Chamber of Commerce and other trade bodies. These have been conveyed to His Majesty's Minister in China, and he has been instructed to bring to the notice of the Chinese Government the difficulties apprehended by United Kingdom traders. I may add that the Chinese Government have now authorised the postponement of the date of coming into force of the Regulations to 1st January, 1934, and there is good reason to hope that they will shortly sanction the use of English or French descriptions where the use of Chinese would cause difficulties.

IMPERIAL PREFERENCE (CEYLON).

Captain P. MACDONALD: 22.
asked the President of the Board of Trade what action he proposes to take, in view of the Ceylon Government's refusal to adopt the recommendations of the Ottawa Conference with regard to Imperial preference?

Mr. RUNCIMAN: The failure of the State Council to approve certain proposals put before them by the Board of Ministers in pursuance of the Ottawa Agreements is a matter for the Governments concerned, namely, certain Dominion Governments and the Government of India.

Captain MACDONALD: Is not the failure of Ceylon to adopt the agreements a breach of the recommendations of the conference?

Mr. RUNCIMAN: That is a matter for the Dominions Governments and the Government of India.

Captain MACDONALD: Surely it affects this Government?

Mr. RUNCIMAN: No, my hon. and gallant Friend is mistaken. The Ottawa Agreements do not affect this Government in that sense.

TIMBER IMPORTS (SHIPBUILDING).

Colonel GOODMAN: 44.
asked the Financial Secretary to the Treasury whether he is aware that timber imported duty free into the United Kingdom for use in building or fitting ships cannot be moved from the registered shipyard for dressing and manufacture without the payment of duty, whereas the foreign dressed and manufactured product enters duty free; and whether, in order to give the British manufactured product equality of treatment, he will instruct the Commissioners of Customs and Excise to give effect to the provisions of Section 11 (2) of the Import Duties Act, 1932, relating to drawback?

The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): Under Section 11 (1) of the Import Duties Act, goods may be imported duty free only if consigned direct to a registered s1hipbuilding yard for the purpose of the building, repairing or refitting of ships in that yard and the exemption from duty does not extend to goods removed from the yard for use in the manufacture or preparation of shipbuilding material elsewhere. As regards the second part of the question, I would remind my hon. and gallant Friend that the Commissioners of Customs and Excise have no power to pay drawback on goods removed into such yards in the absence of a drawback order made on the recommendation of the Import Duties Advisory Committee in respect of goods of that class or description. There is no such order in force in respect of the goods he has in mind.

Colonel GOODMAN: Does not the hon. Gentleman see that in enforcing this Act he is placing a premium on foreign labour, and does he not think that the unemployed in this particular industry should be encouraged and not discouraged?

Mr. HORE-BELISHA: This is a matter for the Import Duties Advisory Committee, and I would inform my hon. and gallant Friend that the parties interested in the question have, up to the present, laid no specific proposal before that committee. It would naturally be considered if they did so.

EXPORT CREDITS.

Mr. GIBSON (for Colonel WEDGWOOD): 37.
asked the Secretary to the Overseas Trade Department what was the position of the export credits scheme as at 31st March, 1933, stating the total amount of the advances that have been made under that scheme to exporters, between what dates these advances were made, how much of that total amount has been repaid, how much of it has been written off as irrecoverable, and how much of it is still outstanding?

Lieut.-Colonel J. COLVILLE (Secretary, Overseas Trade Department): As the answer is long and contains a number of figures I will, with the right hon. Member's permission, circulate it in the OFFICIAL REPORT.

Mr. GIBSON: Can the hon. and gallant Gentleman give me particulars as to the amounts outstanding with regard to Russia and whether any of those liabilities have been written off?

Lieut.-Colonel COLVILLE: That would require a separate question.

Following is the answer:

Under the Exports Credits Guarantee Scheme no advances are made, but the export of United Kingdom goods is facilitated by guaranteeing the payment of credits in approved cases up to a maximum of 75 per cent. Under the arrangements which have been in force since the introduction of the scheme on 1st July, 1926, the Department had, up to 31st March last, issued policies and concluded contracts under which it assumed liability to guarantee a maximum of nearly £25,000,000, in respect of credits amounting to just over £40,000,000. Of this liability, £16,300,000 had expired up to that date; the ascertained losses were £52,000; the amount outstanding, including losses not yet ascertained, was £8,300,000. For further information about the position of the scheme, including reserves made against outstanding liabilities, premium re3eipts and administrative expenses to the latest date available, I would refer the right hon. Member to the commercial accounts of the Department, published in the annual volume of trading accounts.

COMPANIES ACT.

Mr. LOGAN: 12.
asked the President of the Board of Trade whether he is aware that a meeting of the Stoll Theatres Corporation, Limited, was held on 25th April, called by some 400 holders of 370,000 shares, following the refusal of the chairman to give at the last annual meeting information as to the losses of the subsidiary companies and other matters in the auditors' certificate; that although the resolutions moved at that meeting requiring the directors to give the information were actually carried on a show of hands, the chairman declared the resolutions to be lost and declined either to give the figures of the voting or to allow a recount or the appointment of tellers; and if he will inquire into the matter with a view to amending the Companies Act, 1929, or otherwise putting a stop to the continuation of such practices?

Mr. RUNCIMAN: My attention has been drawn to a newspaper report of the meeting to which the hon. Member refers. According to that report each extraordinary resolution moved at the meeting was lost both on a show of hands and by a large majority on a poll demanded by the chairman. I have in any case no powers to inquire into circumstances of the kind suggested by the hon. Member, but, if he has any specific proposals to make as to the amendment of statutory requirement regarding subsidiary companies, they will be noted for investigation when the amendment of the Companies Act is under consideration.

Mr. LOGAN: If I send some information to the right hon. Gentleman will he consider it?

Mr. RUNCIMAN: Certainly.

MERCANTILE MARINE (CERTIFICATED OFFICERS).

Vice-Admiral CAMPBELL: 19.
asked the President of the Board of Trade why persons in charge of and second hands of fishing vessels over 25 tons are required to hold a Board of Trade certificate of competency, while persons in charge of and mates of cargo steamers operating within home-trade limits are not required to hold such certificates?

Mr. RUNCIMAN: The requirements referred to in the question are statutory and of long standing. A number of fishing vessels make voyages extending far beyond the coasting limits.

Vice-Admiral CAMPBELL: May I ask whether the home trade does not include voyages to Northern Europe?

Mr. RUNCIMAN: Yes, but a certain number of the fishing vessels do their fishing far outside the home-trade limits both north and south.

Vice-Admiral CAMPBELL: 20.
asked the President of the Board of Trade how many vessels under the British flag employed on coastwise traffic have no British certificated officers on board; and how many vessels under the British flag in all parts of the world have no British certificated officers on board?

Mr. RUNCIMAN: I regret that this information is not available.

Vice-Admiral CAMPBELL: 21.
asked the President of the Board of Trade how many British certificated officers of the merchant navy are unemployed?

Mr. RUNCIMAN: I regret that I am unable to give the desired information.

Vice-Admiral CAMPBELL: Will not the right hon. Gentleman consider having a Marine Department in his office to advise him in these matters?

Mr. RUNCIMAN: I believe that the information for which my hon. and gallant Friend asks can be obtained from some of the service organisations, but we do not necessarily keep these records at the Board of Trade.

Mr. HANNON: Surely the Marine Department of the Board of Trade ought to have some knowledge of the number of certificated officers of the Mercantile Marine who are out of posts, and that it ought to facilitate giving these men posts?

Oral Answers to Questions — SCOTLAND.

BRACKEN.

Mr. HENDERSON STEWART: 26.
asked the Secretary of State for Scotland if he is aware of the increase in the spread of bracken and the consequent reduction in hill grazing and sheep stocks
in Scotland; and whether, in order both to encourage home production and to reduce unemployment, he will take immediate steps to organise a wide-spread bracken-cutting scheme?

The SECRETARY of STATE for SCOTLAND (Sir Godfrey Collins): I am aware that bracken has increased in recent years and that any extension of this weed is likely to reduce the productivity of hill grazings. As the hon. Member is no doubt aware, the elimination of bracken, growing on a farm at the commencement of a tenancy, is an improvement for which a tenant is entitled to compensation from his landlord. I am doubtful, in view of the difficulties involved, whether a general scheme of bracken-cutting is feasible as a means of unemployment relief.

SMALLHOLDINGS, FIFE (RENTS).

Mr. H. STEWART: 27.
asked the Secretary of State for Scotland if he is aware that the rents charged on the smallholding estate at Thirdpart, Fife, are excessively high as compared with the rents charged on adjoining farms and inequitable as between different holdings on the estate, and that two petitions from the holders have been presented to the Department of Agriculture requesting general revision of rents; and whether, in the circumstances, he will cause a special inquiry to be held with a view to adjusting the rents of all the holdings to an equitable level?

Sir G. COLLINS: I have no information regarding rents charged for farms adjoining the smallholdings at Third-part. The tenants at Thirdpart are entitled to have their rents revised periodically by the Land Court, and I find that, of 15 holders who have qualified for revision of rent, four have exercised their right by applications recently heard by the Land Court and consideration of applications now made in the other cases is pending. In these circumstances I am not satisfied that it is necessary to hold the special inquiry suggested in the question.

Mr. STEWART: Does not the right hon. Gentleman think that it is imposing an impossible task upon the Land Court to reduce one or two rents in accordance with the rules, and the seven-year rule in particular, while leaving other rents high;
and, in view of that difficulty, will he not reconsider his, decision?

Sir G. COLLINS: The Land Court was established by Parliament for an express purpose; it has great experience in settling these matters, and I feel that we can leave them fairly in their hands.

AGRICULTURAL CREDITS.

Sir IAN MACPHERSON: 28.
asked the Secretary of State for Scotland if he can now make any statement with regard to the Agricultural Credits (Scotland) Act, 1929?

Sir G. COLLINS: The corporation has appointed its manager and secretary and I understand that it will intimate shortly its permanent address. Further announcements will be made by the corporation as soon as it is in a position to receive applications for loans.

Sir I. MACPHERSON: Is not the right hon. Gentleman aware that for three years English farmers have had the advantage of their Act, and will he take steps to see that this farce in regard to Scotland is ended?

Sir G. COLLINS: I am afraid that I have no power to take further action in this matter. Progress must rest entirely with the corporation.

ALBION GREYHOUNDS (GLASGOW), LIMITED (TOTALISATOR).

Mr. T. WILLIAMS: 30.
asked the Lord Advocate if, arising out of the prosecution against Albion Greyhounds (Glasgow), Limited, for using a totalisator, which originally came before the court on 27th March and has again been adjourned until 17th May, he can state whether, in the meantime, the totalisator in question is being allowed to be operated?

The LORD ADVOCATE (Mr. Craigie Aitchison): Yes, Sir.

Mr. WILLIAMS: Do I understand the hon. and learned Gentleman to say that the totalisator is still being operated?

The LORD ADVOCATE: Yes, Sir.

TUBERCULOSIS ORDER.

Mr. KIRKWOOD: 35.
asked the Minister of Agriculture if he is aware that the veterinary inspector of Glasgow, in a report to the Markets Committee, states that no less than 14.5 per cent. of milk
samples tested by him contained virulent tubercle bacilli, that many infected cows are sent, to the city market for sale, and that nearly 9,000 bovine consumptives remain undetected in Scotland; and what measures are to be adopted to ensure greater efficiency in working the Tuberculosis Order of 1925 pending the institution of national control of milk supervision?

The MINISTER of AGRICULTURE (Major Elliot): I have seen the report to which the hon. Member refers, and understand that the Department of Health for Scotland hope to publish shortly the results of a recent investigation on this subject carried out in the four large cities of Scotland. A Committee of the Economic Advisory Council is now considering what practical measures can be taken to reduce the incidence of tuberculosis (as well as of other diseases) among mulch cattle in this country, including any changes desirable in existing administrative practice; and the hon. Member may rest assured that the recommendations of that Committee upon this difficult question will receive the most careful consideration.

DEATHS UNDER ANAESTHETICS.

Mr. LEONARD (for Mr. NEIL MACLEAN): 29.
asked the Secretary of State for Scotland the number of deaths during 1932 registered at the respective registrars' offices as having died while under anaesthetics at the Royal, the Western, and the Victoria Infirmaries, Glasgow?

Sir G. COLLINS: According to the registrars' returns, the numbers of deaths registered in 1932 as having occurred in the institutions mentioned during, or following upon, the administration of anaesthetics, were respectively as follows: Royal Infirmary, 29; Western Infirmary, 26; Victoria Infirmary, 6.

NAVAL AND MILITARY PENSIONS AND GRANTS.

Mr. SMEDLEY CROOKE: 31.
asked the Minister of Pensions whether he will state the total number of pension claims that have been admitted outside the seven years' time-limit?

The MINISTER of PENSIONS (Major Tryon): The late applications which have at any time in past years been recognised numbered up to the end of March last 2,745, while a further 721 cases were found to require no more than medical or surgical treatment.

Mr. CROOKE: 32.
asked the Minister of Pensions the number of surgical boots issued to pensioners for the six months ended 30th September, 1932, and for the six months ended 31st March, 1933; and what saving has accrued to his Department by the number of pensioners' own boots that have been fitted with suitable adaptations where previously surgical boots had been supplied at the expense of the Ministry?

Major TRYON: During the six months ended 30th September last 6,294 surgical boots were issued to pensioners. During the succeeding six months to the 31st March of this year 6,325, a larger number, were issued. The records of the Department do not enable me to give the information asked for in the last part of the question.

Mr. CROOKE: Will my right hon. and gallant Friend consider the advisability of reverting to the old custom of giving surgical boots instead of adapting these ordinary ready-made hoots?

Major TRYON: I am very glad that the hon. Member has given me an opportunity publicly to contradict a misapprehension under which he is suffering. More surgical boots have been supplied than before, and the rule has never been altered.

CRIMINAL PROSECUTIONS (POLICE EVIDENCE).

Mr. MANDER: 33.
asked the Secretary of State for the Home Department if his attention has been called to recent instances where the police have obtained evidence to justify criminal prosecutions by acting in disguise; and whether this action has his approval?

The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Gilmour): I have seen references in the Press to three cases in which objection was taken, apparently by the defence, to the methods adopted in obtaining evidence in support of the charge. So far
as I am aware no adverse comment was made by the Court. In one of the cases the proceedings were at the instance of the Director of Public Prosecutions. It is sometimes known that offences are being committed, but proof may be obtainable only by resorting to a subterfuge. Whether such methods are justified must depend on the circumstances of the individual case, and I have no doubt that the possibility of unfavourable comment by the Court is sufficient to check any abuse.

DOG RACING (LOCAL OPTION) BILL.

Mr. LECKIE: 34.
asked the Home Secretary whether, in view of the withdrawal of the Dog Racing (Local Option) Bill, he intends to introduce a Bill on behalf of the Government to deal with this question?

Sir J. GILM0UR: There is no prospect of this subject being considered for inclusion in this Session's programme of legislation.

Captain ARTHUR EVANS: In view of the great uncertainty which exists throughout the country on this question, and its effect on unemployment, will the Government announce their policy at the earliest possible moment after having examined the Report of the Royal Commission?

Sir J. GILMOUR: Oh, yes, Sir.

LEAGUE OF NATIONS (FAR EAST AFFAIRS).

Mr. MANDER: 38.
asked the Secretary of State for Foreign Affairs when the advisory committee of 21 of the League of Nations concerning affairs in the Far East last met, and what the result of its deliberations has been so far?

Lieut.-Colonel COLVILLE: I have been asked to reply. The League of Nations Advisory Committee of 21 met last on the 28th March. As regards the result of its deliberations my right hon. Friend has nothing to add to the information given in the reply to the second half of the question put by my hon. Friend on the 25th April.

Mr. MANDER: Clan the hon. and gallant Gentleman say whether it is likely to meet in the near future?

Lieut.-Colonel COLVILLE: I understand there are two sub-committees. One is likely to meet very soon.

FISHING INDUSTRY.

Mr. BURNETT: 36.
asked the Minister of Agriculture whether he is yet in a position to make any statement with regard to the completion of an agreement for the quantitative regulation of fish imported into this country from Germany, Denmark, Norway, Sweden and Iceland?

Major ELLIOT: An agreement on the quantitative regulation of the imports of fish from Denmark has already been made, the, particulars of which are given in Article 5 of the Trade Agreement recently presented to Parliament. Negotiations with the other countries referred to in the question are proceeding.

Oral Answers to Questions — GOVERNMENT DEPARTMENTS.

NEW BUILDINGS, EDINBURGH.

Mr. SCRYMGEOUR-WEDDERBURN: 39.
asked the First Commissioner of Works whether there is any probability that any scheme for the construction of new Government buildings in Edinburgh may be approved in the near future; and whether he sees any prospect of agreement among the various persons or bodies in Edinburgh whose opinions are being consulted?

The FIRST COMMISSIONER of WORKS (Mr. Ormsby-Gore): I am not in a position to give any definite answer to the first part of the question. All I can say is that I have sought the best advice possible and am now hopeful of some agreement being reached.

Mr. SCRYMGEOUR-WEDDERBURN: Is it the case that things are being held up by the inability of the people in Edinburgh to agree, and, if their differences cannot be composed, will the Government produce a scheme of their own in view of the urgency of the matter?

Mr. ORMSBY-GORE: I think the Chancellor of the Exchequer explained that it is not exactly a question of urgency, but it will take some time to
work out a new plan and new designs, and until the questions of siting and accommodation and the nature of the buildings have been agreed wall the various people in Edinburgh, there is no real hurry.

CUSTOMS AND EXCISE.

Mr. LEONARD: 43.
asked the Financial Secretary to the Treasury the number of indoor and outdoor staff of the Customs and Excise Department as at 1st April in each of the following years: 1914, 1919, 1924, 1929, and 1933?

Mr. HORE-BELISHA: As the answer involves a number of figures I will, with the hon. Member's permission, circulate such as are available in the OFFICIAL REPORT.

Following are the figures:

The total indoor and outdoor staff of the Customs and Excise Department for the years required as at 1st April, or, in the case of the year 1914, at the date for which figures are available was as follows:—


1st August, 1914
10,082


1st April, 1919
11,145


1st April, 1924
11,273


1st April, 1929
12,065


1st April, 1933
13,245

Oral Answers to Questions — FINANCE BILL.

BRITISH SPARKLING WINES (DUTY).

Mr. PERKINS: 40.
asked the Chancellor of the Exchequer whether the proposed duty on British sparkling wines will apply to wines made in country districts from vegetables such as sugar beet, potatoes, dandelions, and gooseberries?

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): The duty applies to all British sparkling wines sent out from the premises of a licensed maker for sale, or from the premises of any person who has rendered still British wines sparkling. If my hon. Friend will send me particulars of any case in which there may be doubt I will have inquiries made and let him have a definite answer.

Mr. PERKINS: Do I understand that, if I send my right hon. Friend a sample of these wines, he will taste them and give me a definite answer?

CO-OPERATIVE SOCIETIES (TAXATION).

Mr. HANNON: 41.
asked the Chancellor of the Exchequer whether, in the forthcoming legislation to deal with co-operative societies, he will insert provisions to put an end to the advantage now enjoyed by these societies over ordinary traders in tendering for Government contracts by reason of their paying no income Tax on trading profits?

Mr. CHAMBERLAIN: My hon. Friend seems to me to be putting forward merely a particular instance of a general contention. At present I can only ask him to await the proposals which, as I said in my Budget speech, must in due course be embodied in this year's Finance Bill.

Mr. HANNON: May I ask whether, in point of fact, co-operative societies under the Industrial and Provident Societies Act are not violating the law in dealing with people outside their own society?

Mr. CHAMBERLAIN: I do not think they are violating the law.

LAND TRANSFERS.

Mr. ANSTRUTHER-GRAY: 45.
asked the Financial Secretary to the Treasury what would be the estimated annual saving that would accrue from a repeal of Section 28 of the Finance Act, 1931?

Mr. HORE-BELISHA: The average annual cost of the staff engaged on the administration of the provisions of the section referred to is approximately £6,000. I would, however, remind my hon. Friend that, as I stated in a reply to a question in this House on the 31st October last, the information derived from the particulars of the transfers of land is required for various purposes and is of considerable value. In these circumstances, the real effect of the repeal of the section would be not a saving but an appreciable loss.

INCOME TAX.

Mr. H. WILLIAMS (for Mr. MITCHESON): 42.
asked the Chancellor of the Exchequer if he can state, approximately, the number of persons assessed to Income Tax for the year 1932–33; and what proportion of these were exempted from taxation as a result of allowances and reliefs?

Mr. CHAMBERLAIN: I regret that I am not yet in the position to furnish Estimates for the year 1932–33, but my hon. Friend will find estimates for the year 1931–32, in which year the exemption limit and allowances were the same as in 2932–33, in Table 43 on page 66 of the recently published Seventy-Fifth Report of the Commisisoners of Inland Revenue (Command Paper No. 4196).

IMPERIAL LEGION.

Mr. T. WILLIAMS (for Mr. RHYS DAVIES): 25.
asked the Financial Secretary to the War Office whether any buildings, equipment, or uniform have at any time been lent to members of the Imperial Legion by his Department in any part of the country; and, if so, will he state under what authority it was lent?

The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Duff Cooper): I have now ascertained that the Imperial Legion has been allowed to use a room in the Stretford Road Drill Hall, Manchester,

once weekly, without; payment. The loan of a drill hall without payment is departure from accepted practice, and steps are being taken with a view to preventing its recurrence. I have no information that any other buildings, equipment or uniform have been lent to the Imperial Legion.

Mr. WILLIAMS: Can the hon. Gentleman say who gave permission for the use of this hall?

Mr. COOPER: The local authority.

BUSINESS OF THE HOUSE.

Motion made, and Question put,
That this day, notwithstanding anything in Standing Order No. 15, Business other than the Business of Supply may be taken before Eleven of the clock, and that the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]

The House divided: Ayes, 283; Noes, 38.

Orders of the Day — SUPPLY.

[4TH ALLOTTED DAY.]

Considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

CIVIL ESTIMATES, 1933.

CLASS II.

FOREIGN OFFICE.

Motion made, and Question proposed,
That a sum, not exceeding £124,278, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1934, for the Salaries and Expenses of the Department of His Majesty's Secretary of State for Foreign Affairs."—[Note: £85,000 has been voted on account.]

3.32 p.m.

The PRIME MINISTER (Mr. Ramsay MacDonald): I have been informed that it might facilitate progress and meet the convenience of the Committee if I opened the Debate to-day, and, of course, I very willingly play my part in that regard. At the same time, I must warn the Committee that I can say very little more than I said last Thursday. Anyone who reads the newspapers with an appreciation of the issues involved must see that the state—I cannot exactly say of the negotiations, because some of these subjects are not even under negotiation—but the position of very delicate matters which must be faced without delay, and must be faced with the determination to come to a definite agreement upon them, is not to be improved, and the prospects of success are not to be improved, by statements from me, as full, perhaps, as would satisfy some Members of the Opposition, on what is going on in a tentative and purely noncommittal way. Therefore, I ask, not only the indulgence of the Committee, because it does not amount to indulgence, but the co-operation of the Committee, so ' that anything I may say, it may be in unconsidered phrases, will not be added to the difficulties or subtracted from the prospects of a good issue.
I repeat that four days in Washington were all too brief to come to agreements, to settle things; but four days were perfectly adequate for the President and myself to exchange information, to survey
the country that has to be crossed by both our Governments before satisfactory issues are reached; and we employed our time purely and solely in that exercise. I informed the President as well as I could and as fully as I could of the situation in which this country finds itself, and he was good enough, with, I am perfectly certain, the same candour and the same desire, to expose everything regarding his country, so that he might report to his Government and I might report to my colleagues here what the position was, what the nature of the problems was, where impossibility lay, and where possibility lay.
I hope that there is no Member of this Committee who is under any delusion regarding the difficult days that are ahead of us. There were three big sections of interest that had to be examined in the way I have described—debts; the business that must come up at the Economic Conference in accordance with the report presented to all the nations involved in that conference by the expert committee that met at Geneva at the end of last year and the beginning of this year; and there was a third section, a little bit removed from these two, but nevertheless a section about which it was quite essential that the President and myself should have a fairly prolonged conversation, in order that I might inform him of how His Majesty's Government regarded the European situation, the prospects of peace, the pacifying and the disturbing elements, so that the co-operation between our two Governments at Geneva should, without coming to any alliance and without coming to any sealed and signed agreement, be as complete as human beings of good will could make it.
I think the House will agree with me that the Cabinet should be put in possession of the most intimate information upon those subjects. We can write letters and we can send dispatches, and I think those right hon. Members of the House who have been conducting diplomacy, on delicate matters especially, will agree with me when I say that it is the unfortunate experience too often that, the more voluminous letters and dispatches become, the further away becomes the prospect of an agreement. The ordinary channels, most fortunately, as regards London and Washington, are most admirably manned not only by men of great skill in handling negotia-
tions but by men, I had the very best reason for coining away with the conclusion, who are completely trusted by the Governments to which they are accredited. Therefore, when Easter came, and when this House in any event was to get up for nine or 10 days, I was very glad indeed to accept the request made to me by my colleagues that I might spend my Easter holiday going to Washington and steal a few days of my Parliamentary time when the House resumed after the Easter vacation. On Debts I can add nothing to what I have said. There were mutual exchanges of view and, what was still more important, I think, in view of the nature of that problem, exchanges of information as to bow, shall I say, the land lay.
In looking at what I said on Thursday there is one thing that I am not quite sure I emphasised enough, and I want to do that now. There was a complete union of opinion that the International Economic Conference cannot be fully successful unless the Debt question can be removed before it finishes. The final settlement, I am sure now, is going to take a little time. I do not mean by that a long time. I mean literally that it is going to take just a little time. There are so many issues involved; there are so many awkward relationships to be dealt with in the complete and final settlement. Even were no one involved except the President of the United States representing his Government, and myself and my right hon. Friend by me representing this Government—even if that was the chessboard, the moving is going to take a little time before it is settled. Therefore, the settlement must be made as soon as possible. I understood after I had sat down that some misunderstanding was created—if I am responsible for it, I am very sorry—as the result of an answer that I gave to a question put to me by the right hon. Gentleman the Member for South Molton (Mr. Lambert). His question was:
Will the question of War Debts come before the World Economic Conference?"— [OFFicial, REPORT, 4th May, 1933; col. 1007, Vol. 277.]
I replied "No." I am told that that created a little bit of trouble in the minds of various Members of the House. I thought, when I stated that, that all I had said was that there was no change. It was never contemplated that War Debts should come before the Inter-
national Economic Conference. I am not sure that a full list is in yet, but at that conference there may be 60 nations represented. Could any more impossible body have the question of European War Debts placed before it for the purpose of settlement? No one ever suggested that. The Debt negotiations will have to go on concurrently and on parallel lines. They have got to be dealt with by another body of men. I only throw this out as what I hope is a very common-sense reflection and not as an announcement. Far be it from an announcement, and I hope no one either here or elsewhere will take It as an announcement. We are all in London; representatives of 60 nations, including every nation interested in War Debts. The conference is not going to sit from nine o'clock in the morning until midnight. Those who are here primarily for International Conference business will have some measure of time at their disposal which may provide an opportunity for considering the problem of War Debts. A permanent settlement is the thing that we have to aim at. The 15th June is to be an awkward hurdle. What is required is a wide survey of the possibilities in the meantime, and nothing here ought to be said which will so increase difficulties as to make the hurdle impossible to clear.
As regards the Economic Conference, I should like to repeat what I said, because I think the significance of the statement may have been a little lost. On what has naturally become a special and somewhat burning question—the question of the tariff truce—I said this:
I had better say that I felt it to be my duty"—
that is, at Washington—
to point out. how different is the position of a country like our own from that of those which are already high tariff countries, with policies of economic defence already fully worked out and in operation. Whilst I welcomed the idea of a truce during the period of the conference, I made it plain that its application would have to be subject to the safeguards which this difference in our position requires.
Then I added:
This was considered"—
by all those present at that conversation, at that exchange of views—
to be reasons ble."—[OFFICIAL REPORT, 4th May, 1933; col. 1005. Vol. 277.]
Only a few minutes ago, and since I came into this House and sat on this
bench, I was informed as follows: There have been further exchanges of views with the United States Government, and I am now in a position to say that, subject to the settlement of the actual words, and while protecting the essential position of both Governments, there is every prospect of reaching agreement between us as to the advisability of an immediate tariff truce, that is, an avoidance of the adoption of new initiatives which might increase the many varieties of difficulties now arresting international commerce. [Interruption.] I should have thought that this was perfectly plain. I hope that the criticism will be a little more pointed than that. We as a nation are still negotiating and still developing our policy and that continues. Without starting any initiative in some new direction, or taking up new matters which are not merely a continuation of what is going on now, we should agree to a truce, in order to try and help ale success of the International Economic Conference, until we see what the prospects of the success of that conference are to be. Alter all, what does it amount to? It amounts to this. We want, as a result of that conference, to remove barriers, which are unnecessary for national protection, to international trade. We intend that the truce shall not prevent the continuation of the work we have now begun or the work we are developing in accordance with the announcements already made in this House.

Mr. PIKE: In relation to tariffs?

The PRIME MINISTER: There is another question connected with the Economic Conference in which the American Government and ourselves take the greatest interest and on which we place the utmost importance. It is a policy which will enable wholesale prices to be raised in order that producers may be able to go on producing, and thus increasing the volume of trade and putting thousands and thousands of men now unemployed back to work again. There is a third point, or a third section of interest; it is more than a point. The stabilisation of the relative value of currency must be attempted by agreement. I doubt if anyone who has not gone through my experience of the last two or three weeks can appreciate the danger
of unstable international values not only to trade—I take it that the Committee are fully acquainted with that—but to political relationships. When I was still at sea,—[Laughter.]—Hon. Members laugh; I think it is a very valuable point which I have conceded—the United States went off gold. About that matter I have nothing to say as to the merits of the action, but I can assure hon. Members that the political effect at one moment threatened to be disastrous.
Hon. Members must understand that the accusations and the extraordinary stories which were told went far beyond trade considerations and went right into the middle of political tranquillity and good will. There was a tale which contained very grave allegations on the subject with which I am dealing. I found one day in the news which was supplied to me that from Paris there came a story that the British and the French Governments had united, in fact, they used the word "conspired" in order to join in an offensive against the dollar, and that our Equalisation Fund had been placed at the disposal of the French Government to carry on the campaign. As long as there is instability in international relations those sort of things are bound to go on, and the effect, I repeat, on political relations threatens to be most disastrous indeed. Therefore, one of the purposes of the International Economic Conference, which was declared before the United States went off gold, is even more important, as greater fluctuations have taken place as regards some national currencies than at the time when it was decided that this item should be included in the Agenda. Therefore Governments are bound without delay to try and agree so that the danger of serious misunderstandings may be removed and trading confusion and political damage avoided. The dangers will remain until somehow or other, an agreement is come to regarding the stabilisation of the international relations of the currencies of the great trading countries.
Then, as regards security, one of the points that we both considered, that we had very clearly in front of us, was the menace to the tranquillity of the mind of Europe which recent events in Europe had created. We saw quite clearly the extra difficulties that were being put upon Geneva. We saw quite clearly the new
risks with which the Disarmament Conference was being faced, and yet I am very happy to say that the United States Government are prepared to play a further part in tranquillising Europe by agreeing, if the Disarmament Conference comes to anything like a satisfactory issue, to take their part in consultative pacts, the effect of which will be to increase the security of Europe and the safety of threatened nations against war. This is a very considerable advance. Mr. Stimson began it in that courageous statement he made before he went out of office regarding the need to redefine neutrality, and the present Government have expressed their intention of going further and making their obligations quite definite and authoritative. The announcement will be made at Washington in due time when the matter is further considered and its details are dealt with.
I notice that there were some indications that, apart from the statement I have just made, there is no programme.of how to do this. That is exactly what I had no intention of trying to get at Washington. Does anyone mean to say, if they go back and review some of the points I have dealt with as matters of agreed intention, that any one of these matters could have been taken further? If we had gone no further than the very beginnings of examining details, the four days would have been gone. What was done was this: Until then we did not even know the intentions of the United States Government, and the United States Government was not in possession of our position and of the work we have been doing in Geneva and the declarations that have been made in this House.
That is the gain of Washington, and it is a very substantial gain, the importance of which, I repeat, can be best appreciated by anyone who has ever taken part in big international negotiations. There are many slips between the cup and the lip, and, as I said just after I rose to address the Committee, the contents of the newspapers on both sides of the Atlantic show us that it is one thing to intend, but if opinion or newspaper circulation seems to call for obstacles to be put in the way, the very best will of two men, or three men, or a dozen men cannot, I think, be thwarted, when we are determined, as far as in
us lies, that that will not take place; but that intention certainly can be delayed, and new and unnecessary and altogether imaginary obstacles can be put in the way of its realisation. Whatever may happen, the United States and ourselves now clearly understand each other, that we shall enter with a full determination to do everything we can to make the International Conference a success, and thereafter to continue to help it to remove fear from the hearts of the pacific nations of Europe.

4.6 p.m.

Mr. LANSBURY: I beg to move to reduce the Vote by £100.
The Prime Minister, in his opening remarks, appeared to deprecate our asking for further information of the questions connected with the World Economic Conference and his visit to Washington, and he was at some pains to tell us that, whatever might be said to-day, he was anxious that nothing should be said that would, as it were, put sand in the machine, or in any way injure a settlement. I should like to say, first of all, that there is no one in this House or in the country who does not desire friendly relationships both with the United States and with all other nations. We have no desire to put grit into any machine. But while it is perfectly true that this matter which we are discussing is a very serious one, and, as we are continually told by the Front Bench opposite, there are very difficult days ahead, we who sit on these benches think that the country is entitled to know, after nearly two years of office by the present Government, what their policy in relation to the various questions to came before the Economic Conference really is.
This afternoon the right hon. Gentleman told us at the outset that he did not think he could tell us very much more than he told us the other night. I think he has lived up to that statement. I listened very carefully, and I expect the Committee listened very carefully, and I am bound to say I am no wiser as to what the policy of the Government is than I was at the conclusion of the speech last Thursday and now at the end of to-day's speech. It is simply words, and words and words. There has not been a single concrete proposition put before the Committee. While it is quite true that we have 10 right to expect
the right hon. Gentleman to divulge any confidential discussion he had with the President as to American policy, we maintain that this House and the country have a clear and definite right to know what the policy of our Government is, and there is no one in the country who ought to stand up for that more than the right hon. Gentleman. He, together with a number of other men, formed the Union of Democratic Control, whose main object was to get rid of secret diplomacy.

Sir AUSTEN CHAMBERLAIN: You did that successfully in your Cabinet.

Mr. LANSBURY: I think the right hon. Gentleman might save that gibe, because the Cabinet in which his respected father was dropped bricks quite as successfully as any Labour Government. All this rubbishy nonsense about Cabinet secrecy! I am ashamed of the right hon. Gentleman, after all his experience, standing up and having the impudence to say that. The record of his party, especially during the days of Mr. Balfour's last administration, was no credit to any of the Members of the Cabinet concerned. Everybody who lived during that period remembers it, and everybody knows that when Cabinet Ministers fall out the public usually come by their own. I think they have repented at leisure. [An HON. MEMBER:"Too late!"] Quite too late, and they have got to put up with it.
The last part of the right hon. Gentleman's speech rather inferred that by going to Washington he was able to inform the President of what had been happening at Geneva and in this House. Does he really expect us to take that seriously? Has not the President of the United States all the avenues of information open to him that even the humblest citizen of this country and of America has, and knows quite well what is happening at Geneva without the right hon. Gentleman travelling over the sea?

The PRIME MINISTER: indicated dissent.

Mr. LANSBURY: Well, if the right hon. Gentleman looks up the OFFICIAL REPORT to-morrow he will see what he said, that really one of the things he had done was to enlighten the President.as to the happenings at Geneva and in this House. I do not think it was worth
while travelling to Washington to do that. Also I want to say that I do not really understand—perhaps other Members of the Committee did, but they were not very cheerful about it—what he exactly meant when he told us that the President agrees with him that, unless complete agreement as to the settlement of War Debts is arrived at before the Economic Conference closes, the Economic Conference will not have been a success. I understand now that there are to be two conferences sitting at one time, one dealing with the economic conditions and the other dealing with War Debts. Do I understand that correctly?

The PRIME MINISTER: I said it would be possible.

Mr. LANSBURY: He carefully safeguarded himself. That is what the right hon. Gentleman always does. I do not know what he means, and I undertake to say there is no one in this Committee knows what he means. He said quite definitely that there would be 60 odd nations represented, and within those 60 nations there would be representatives of all the Powers concerned with War Debts, that the conference would not sit from early morning till late at night, and that it would be possible to have another conference sitting dealing with War Debts. Am I right so far? It is very important that we should know.

The PRIME MINISTER: I said that it would be possible.

Mr. LANSBURY: That is exactly the sort of statement that we get from the right hon. Gentleman. We do not even know now whether War Debts will be discussed. This is not a joke; it is a very important matter. I understood the right hon. Gentleman to say that unless a settlement was arrived at both he and the President agreed that the Economic Conference would not have succeeded. Then he went on to say that while it was true War Debts would not be discussed at the larger conference he inferred—I admit that he did not use the actual words, but he led us to believe it—that some other body would he discussing a War Debt settlement. Now he tells me that he safeguarded himself. I do not think he is treating the House or the country fair to safeguard himself in that fashion. I ask him now, categorically, will there be after the 12th June, while
the Economic Conference is sitting, a conference at the same time discussing and trying to arrive at a settlement on War Debts? Will he please answer me?

The PRIME MINISTER: My answer is this. War Debts will have to be settled before any International Economic Conference can be a success, and every opportunity will be taken to effect that.

Mr. LANSBURY: If that satisfies the Committee, they will be satisfied with anything. I do not intend to make any effort to deal with what the right hon. Gentleman has said to-day, because he has not said anything concrete as to the Government's policy. I propose to make my own contribution to this discussion and to put some questions to the right hon. Gentleman in the hope that pernaps some other Minister will try his 'prentice hand at giving us an answer. I would point out to whoever reads anything that may, be said in this Debate, that the Government have not on any single occasion up to now taken the House into their confidence as to what they consider is the real economic problem that the world has to face. The right hon. Gentleman has used all kinds of language to tell us the sort of questions that might come up, but he has not on one single occasion taken the trouble, nor have any of his colleagues done so, to tell the nation why this conference is being held. It is true that the economic situation of the world is very bad. It is true also that that condition of things arises in all sorts of countries. When the right hon. Gentleman is speaking, or when his colleagues are speaking, on behalf of this nation, they argue at one moment that it is necessary to keep on the Gold Standard. On another occasion that it is good to be off the Gold Standard. On yet another occasion they tell us that it is a balanced Budget, but, when it is pointed out that another country has an unbalanced Budget, they say:" Well, they have not suffered quite so much as we have done." On some occasions it is tariffs, and on other occasions it is Free Trade. But we have never had a clear and coherent statement of the Government's own policy.
Whatever statement they have made on tariffs was smashed by the President of the Board of Trade in his speech last week, when he gave us an apology for
going back to Free Trade relationships with countries in Scandinavia and Denmark. He told us then what every novice has been saying to the Government ever since they came into office, that the mere shifting of trade from Canada to Denmark, or from Denmark to Canada, did not increase the volume of trade one bit, but only shifted it. The right hon. Gentleman told us last week that in this beautiful capitalist world in which we are living some industries must suffer for the good of others, but neither he nor his colleagues have ever attempted to get down to the real bed-rock situation. I do not think the Prime Minister is fair to himself in this matter, because he knows perfectly well, and he has taught it to 6,000,000 people, relatively speaking, that the world problem that has to be solved is how to bring abundance to the service of the masses of the people. In all the speeches that are made by right hon. Gentleman opposite there has never been any appreciation of that fact. They never tell us how they propose to equalise consumption with production. There is not, one of them who would stand up to-day and say that either Free Trade or tariffs can accomplish that feat. Free Trade never accomplished it when this country was on Free Trade. No one, I think, can question that fact. During the last 18 months we have been on tariffs, and we are doing our best now to try to modify the policy which we were told was to save the nation. So far as I am concerned and so far as my colleagues on these benches are concerned, we have never said that either one or the other of those policies was the real call of prosperity or of poverty. There may be occasions when tariffs may be good and there are other occasions when Free Trade is the proper policy to adopt.
The point that I want to make—it is necessary for us to make it, however other people may dissent from it—is that before the world economic situation can be grappled with and settled these facts must be faced and grappled with by those who are going to attempt a settlement: in countries where there is Free Trade, in countries where there are tariffs, in countries where Budgets are balanced, in countries where Budgets are unbalanced, in, countries on the Gold Standard, in countries off the
Gold Standard, there is poverty, destitution, unemployment and want. No one can contradict that statement. Therefore, all the discussions in this House during the last two years, especially on these subjects, have ignored the fundamental truths which underlie the situation. No one knows that better than the Prime Minister. It may be that we are wrong, that our analysis of the situation is wrong, and that our remedy is wrong, but let someone who is going to the Economic Conference tell us how they propose to settle that question. Let the Prime Minister, or the Foreign Secretary, or the President of the Board of Trade, or anyone else, tell us what propositions they are going to make to the World Conference for a solution of the problems that I have tried to state. It has not been done yet, and this House and the country are entitled to know.
We are entitled to know what the Prime Minister means by the raising of world wholesale prices. It sounds good in the ears of those who handle goods in a wholesale manner. The argument has been, and I have heard it here again and again, that there is a great lag between wholesale and retail prices. In any ordinary civilised society that would have been dealt with long ago, but it has been allowed to remain. It is true that the raising of world prices in one way or the other might affect the people who are called the rentier class, or the moneylenders as I prefer to call them, and it is also absolutely true that the people who will pay most owing to the raising of prices are the great masses of working people. About that there can be no question. There is no secret that the Prime Minister need hide, in case he should upset his negotiations. Let him tell us by what machinery he proposes to raise prices? Let him also tell us a little more of the reasons why it should be done. We want to know, because this is a very important matter for the people whom, at any rate, we think we represent. It is very important that they should know what raising prices really means for them, and the machinery by which it is going to be done. The latter is more important than anything else.
I do not think the right hon. Gentleman has begun to think how he is going to do
it. I do not think that the Members of the Government have the least notion how they propose to do it. I am quite sure, however, that if it is done it will be the working people who will have to pay. In our view, and I state this quite seriously, this doctrine or theory of raising world prices has come about because wages are already down to such a point that they cannot be put down any further, and this is the only way by which those who manage and organise industry hope to get something more out of it than they are able to get at the present time. I want to know definitely and distinctly how the right hon. Gentleman proposes to carry this through. We want to know from the right hon. Gentleman what international machinery he proposes to set up to accomplish this end. It cannot be done without international machinery. I would like the Prime Minister to tell us that, because he understands our point of view. Will he tell us whether the Government have any policy in regard to international control of the world supplies of raw materials? That is very important, because unless you do have international control I should very much like to know how you are going to govern and regulate prices. You have attempted to regulate supplies of tin and rubber, and you have tried to do it occasionally with tea, wheat and other goods, but you have always failed. Perhaps some right hon. Gentleman will tell us during the discussion how it is to be done. All we know is that control to help profiteers to preserve their profits has always failed, because the profiteers have fallen out among themselves. The point is how it is proposed to safeguard the distribution of the raw materials of the world in order that they may be used for the service of the peoples of the world. At present they are not so used.
Another important question which the Economic Conference must discuss, but about which we have heard precious little except when hon. Members from all parts of the House ask questions, is the competition of the Chinese and the Japanese in our markets. The right hon. Gentleman has written a great deal on this subject; he understands it quite well. What is he, what is his Government, going to propose in order to equalise wages and hours and conditions of labour as between the various Euro-
pean nations and as between Eastern and Western nations? This is a very important question in world economics. The export of capital in the shape of services or goods to China, to Japan and to India, during the last 50 or 60 years has set up an enormous competition with the workers in Lancashire and Yorkshire, and in other parts of this country, and with the workers in America. The standards of life in these countries are much lower than the standards of life here, but this competition has been brought about by the export of capital in various forms from this country to these other countries, and those who are now complaining of this competition are in all probability the persons who have invested money or goods in these countries.
We want to know what the right hon. Gentleman proposes to do about these matters. It is no use saying:" we will consider them; they are very important and must have due consideration." After 18 months this Government of all the talents ought to have arrived at some conclusion on the matter. The right hon. Gentleman knows our policy in relation to this subject. Long ago, if we had had the power, we should have: negotiated agreements with the Indians, the Japanese and the Chinese. Hon. Members of the Tory party who are now laughing have been asking to-day questions as to whether the President of the Board of Trade can make an agreement with. Japan. The fact is that it is the only method by which you can get a settlement, but you can only get a settlement on reasonable lines if you want to arrive at an agreement for the service of men and women and not for the profit of a few men and women. There is another question which, probably, will receive the same sort of treatment as the last. People apparently forget, when they invest their money, that they can only get their interest when someone else accepts goods from the countries where their money is invested. There is the question of commercial debts. Is that question going to be discussed at the Economic Conference? It may be that what I am saying is not worth consideration by right hon. Gentlemen opposite; and it is rather unfortunate that they cannot bear to listen for a little time—I try to listen respectfully to anyone who speaks from that box—

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): The right hon. Gentleman does not appreciate the subject of conversation to which he takes exception; it was as to who should answer him.

Mr. LANSBURY: Everyone knows that if a person is speaking on a subject of this kind and the right hon. Gentleman to whom his remarks are particularly addressed passes the time talking it is a little disconcerting. The subject I was raising is in our judgment one of the most important of the questions that any economic conference can discuss; it is the question of commercial debts; the old question of universal usury, the toll that is paid, or is expected to be paid, to those who lend money, to those who gamble in the exchanges. South America, Germany, most of the European nations, Australia and Canada, owe this country, and certainly the United States, a good deal of money, and it makes trade, and especially trade along the lines which the present Government have adopted, extremely difficult. A Bill. is coming before us tomorrow dealing with one country in South America, and I am not exaggerating when I say that that country and ourselves have come to an agreement which would not have been arrived at but for the fact that the Argentine cannot pay its debts to this country unless we take goods from the Argentine. That is rapidly becoming the position of all debtor nations. The terrible difficulties facing the world are largely due to the fact that great snowballs of debt have been piled up, and, instead of Governments facing the position, especially our own Government, we are renewing the loan and thus making the debt a little larger. Then we alter our fiscal policy, which the Government adopted with so much enthusiasm about a year ago, simply in order to collect these debts.
What do the Government propose to do about this question? What policy are they going to put before the Economic Conference? Sir Josiah Stamp, who is an authority on these matters, and another distinguished economist, has told us that we must have a sort of international bankruptcy court in order that these debtor nations may be freed of their debts and to stop these snowballs of debt constantly increasing. We should
prefer that steps were taken to stop the continued export of capital from this country, and other countries; that these matters should be regulated beforehand rather than allow them to grow in this snowball fashion. But what is the Government's policy on the matter? Are the Government going to continue to frame their policy in relation to these nations always with regard to how much we can get out of them as payment for the debts they have incurred to our nationals. Of course, there are some nations which will simply default and not pay. No one can blame them. They could pay if people would take their goods. But people will not take their goods, and, consequently, some of them default, while others come to us and we change our fiscal system, or we raise a loan to enable them to pay off something, and thus increase their debt by doing so. We do that occasionally in the East End of London. The people in Poplar can understand the legerdemain by which the Argentine is being helped out of her difficulties at the present moment, because they go through the same thing themselves at the pawnbrokers.
The Prime Minister mentioned one matter which, I think, requires more attention than he seemed to imagine, and that is the fact of a great country like the United States going off the Gold Standard and paying off a portion of her debt by a depreciated currency. It may be excellent business, but I am doubtful whether it is excellent morals. It may be good for America but it is not very good for the people who are being paid. People who are receiving salaries are being hit. A great nation like the United States, with its stacks of gold, apparently for no reason at all, we do not know, says that she will debase her currency and pay her debts by giving people less than they bargained for. That may be good business, but I think it is very bad morals, anyhow. I should like to know a little more than the Prime Minister told us what the Government think about it.
That brings me to a kindred subject, and I am sorry that the right hon. Member for Hillhead (Sir R. Horne) and the right hon. Member for Epping (Mr. Churchill) have gone away, and also that the right hon. Member for Sparkbrook (Mr. Amery) is not present. They have
talked at large on the question of the Gold Standard. The Prime Minister has not said a word about it th.,s afternoon. We should like to know what the Government's policy is in regard to the Gold Standard. This has nothing to do with the United States. There ought to be no secret about this. One heard mysterious stories told us by the hon. Member for Putney (Mr. S. Samuel) about gambling in exchange and in currency, and we had serious statements from the Chancellor of the Exchequer about the need for £350,000,000. But we must not ask what he is doing. The right hon. Gentleman says, "All we tell you is that we are protecting the interests of the nation," and so on. Yes, but we read in the newspapers that this question is going to be discussed at the World Economic Conference. Who has a right to know what the policy of the Government is if we have not that right? Who has more right than the House of Commons?
The right hon. Gentleman I mentioned just now proved conclusively some weeks ago in this House that the Gold Standard was all fudge, and the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) poured more scorn than I could on this whole business of financial jugglery. I do not want to use any extreme language. I ask the right hon. Gentleman, in view of the statements that were made here last week, what is the Government's policy to be at the Economic Conference? How does he propose to bring about this international arrangement? I tried to follow him when he spoke on the subject, but I was left in a maze of words. I asked him to tell the Committee what the Government really intend. We hear stories of the pound being pegged to this and pegged to the other. It would be rather nice to know where the Government are coming down, where they propose to peg it now. It is all a gamble, I know, because we were told by an authority on the subject last week that it was all a gamble; but we want to know what steps the right hon. Gentleman proposes to suggest to the Economic Conference to put an end to the gamble. When he talked about the rise in the world wholesale prices he left us guessing how he proposes to do it. Now I ask him how he proposes to deal with this subject?
We have this great fund of £350,000,000. We were told at the start that it was not to be permanent, that it was only to help us over this time. We ask now what permanent arrangements the Government propose to put an end to the gambling in currency and exchange. that goes on..[think it is a monstrous thing that at this time of day the: cost of a commodity should be one thing to-day and another thing to-morrow, simply because some people have determined to gamble and make money out of it. As I said just now, we have had monopolies in wheat, tin, rubber, and other raw materials, but we are faced to-day with the very worst kind of monopoly, and that is a monopoly in the means by which people exchange goods. Where money is concerned I take my stand on this—that money or gold is of no value compared with the ordinary things that men and women live by, that if all the gold in the world disappeared to-morrow the world would not be a scrap poorer. But Governments use gold for various purposes. Our view is that a currency should be used only for the purpose of bringing about the distribution of goods oil, the one hand, to those who need them for consumption on the other. There should never be gambling in currency as there is now. I understand that the Government agree about that. What we want to know is what they propose to do about it?
Then I want to come back to the 'question of War Debts. I do not think that any of us ought to be mealy-mouthed about this. It is often said that we on these benches think of every other country but our own, that we are always willing to sacrifice our own country for someone else's country. But what are the facts with regard to War Debts? We have been told in this House scores of times. This country, which we were told other countries distrusted because they felt we might fail in our obligations. has cancelled somewhere about 11,000,000,000 worth of War Debts to France and Italy. We have allowed to go by default many millions of pounds worth of other Debts, and the only outstanding Debt, outside this country, that stands against us, is the debt to America.

The CHAIRMAN: I do not want to interrupt the right hon. Gentleman unnecessarily, and I am not complaining of anything that he has said, but now that
he is turning to the question of War Debts it would be as well for me to tell the Committee the conclusion to which I have conic as to how far the Committee can discuss that subject of War Debts in this Debate. In view of the fact that it is impossible to discuss foreign relations generally without some regard to these War Debts, I cannot shut them out from this Debate altogether. On the other hand I understand that it is definitely the case that War Debts are not on the agenda of the World Economic Conference, and the expense of that conference being held in London is the only possible item in the Foreign Office Vote upon which War Debts can be discussed in detail. But as they do not come within the business of the Economic Conference the expenses of which are included in the Vote now under discussion they can be discussed only in so far as they affect the question of foreign relations generally, and not in regard to details of policy, as to what should or should not be done for the 'settlement of War Debts. I hope I have made that clear to the Committee, as I wish to prevent any difficulty arising.

Mr. LANSEIURY: Does the Foreign Secretary's salary come under the Vote that is now before e Committee?

The CHAIRMAN: Yes, that is so. Let me explain the matter further. For that reason, if for no other, so far as the existence of War Debts affects the duties carried out by the Foreign Office, I cannot shut them out from discussion to-day, but on the other hand discussions with a view to the settlement of War Debts are not carried on by the Foreign Office at all, and therefore do not come under the Foreign Office Vote; they are carried on by the Treasury.

Sir A. CHAMBERLAIN: On a point of Order. I respectfully submit that it is a matter of domestic convenience among Ministers as to whether a particular Minister carries on a. discussion or not, but War Debts constitute an essential part of foreign relations and must be in order on the Foreign Office Vote, particularly on the Vote for the salary of the Secretary of State.

Sir HERBERT SAMUEL: I presume it will be in order to refer to the matter in the same limited way that the Prime Minister referred to it in his statement to-day.

The CHAIRMAN: The hon. Member for West Birmingham (Sir A. Chamberlain) has not followed what I meant. I expressly stated that a discussion in regard to War Debts could be admitted in so far as War Debts affected foreign relations generally. I am sure that the Committee will realise the difficulty of drawing the line. I think they clearly understand that there are certain discussions in regard to War Debts against which I wanted to warn them. I refer to the discussion of methods for dealing with War Debts which methods would be negotiated not by the Foreign Office but under another branch of the Government, namely the Treasury.

Mr. LANSBURY: I have moved to reduce the Vote by £100 in order to bring in the Foreign Secretary's salary. So far as I understand the matter the negotiations with foreign Governments are usually carried on by the Foreign Secretary. But the point that you make, Mr. Chairman, is just a little awkward for us, because the Prime Minister himself introduced the subject of War Debts, and we have understood that War Debts, as the right hon. Gentleman said, have a great significance in this question of the World Economic Conference.

The CHAIRMAN: I want to give the right hon. Gentleman as little trouble as possible. I quite agree that everything the Prime Minister has said with regard to this subject has been in order, and equally anything of the same nature or in reply to the Prime Minister would be in order also. The right hon. Gentleman will please understand that I do not for one moment want to shut our War Debts in so far as they affect foreign relations. The only thing about which I wanted to warn the Committee was that I must shut out discussion of details of negotiations, details of methods of dealing with War Debts which, if they arose in the discussions of the Foreign Office, would immediately be passed over to another Department. I had no reason to think that the right hon. Gentleman would be likely to go beyond my ruling, but I thought it only fair, for his sake and the sake of the Committee, to state the position.

Mr. LANSBURY: I suppose we must all do our best to meet your Ruling, but we really do want the Committee to face
up to the situation. We are the only country which apparently is to be called upon to pay the pound of flesh. If we inflated our currency we could follow the recent example of the United States; we could follow the example of France, which during the time of the Labour Government paid a debt of £50,000,000 with £10,000,000, simply because French currency had depreciated. It may be said that if we declare that we would not pay in June, that would be repudiation, but I think it is equally repudiation to inflate currency in that way and get rid of a large amount of responsibility. I certainly ask the Government to tell us quite definitely what they propose to do on 12th June. I think we are entitled to know that. This is the 9th of May. There is only a month to go, and we do not want to be put in the position—I tried to escape it on the last occasion—that we are right up against the day, and then have to decide one way or the other without any time for consideration or discussion. If the Government cannot tell us to-day, or will not tell us, what they propose to do by 12th June, and if the American Government say "Pay up," we ask that as early a date a possible be set apart to allow the House of Commons full time to decide its policy.

The SECRETARY of STATE, for FOREIGN AFFAIRS (Sir John Simon): Payment is on 15th June.

Mr. LANSBURY: Well, the 15th June then. I have seen somewhere that it was the 12th June, but it is like most things in the newspapers—nearly always wrong. I also want to know about the proposed tariff truce. If anybody really gained anything at all out of the right hon. Gentleman's statement this afternoon, he is much more understanding than I am, and I would like someone to tell us exactly what that means, and whether Ireland will be at the Economic Conference, and whether Russia will be there. We would also like to know, if the tariff truce is brought into being, whether it will affect the embargo on Russia and the penal tariffs on Ireland. Will they be held up for the time being I My main point, however, is as to the scope of the truce, how it will apply, and so on. I do not want to know what the right hon. Gentleman told the President—he can keep that in the inmost recesses of his
breast, or his heart, or his brains, or anywhere else, as I have no doubt the. President of the United States will—but I do want to know what our own policy is. We want to know, not what the American policy is, but what our Government mean to propose.
In conclusion, we consider that this Conference must fail unless it gets away from the idea that you can re-establish trade and industry on the old basis of cut-throat competition. I have already said a little about Free Trade, but I think the Free Traders in the House must agree that the original theory of Free Trade is finished and dead. There is no such thing now as carrying on business without Government interference or even Government control. I have heard hon. and right hon. Members who are pledged to the old individualist theory of Free Trade advocate, for agriculture and other industries, governmental control in one form or another, and we have passed the period when traders and industrialists can be allowed to function, or are capable of functioning, separately and alone. They are bound, all of them, to submit to Government interference and control, and most of them are now asking for Government help, most of them are hoping, through this Economic Conference and the arrangements that they trust will come from it, that there will be, by some means or other, more security for them, both for their profits and for their trade generally.
So far as we are concerned, we do not want to see a world state which is created to make things better or easier for those whose business in life is merely to make profit, to make money out of the labours of other people. We think it is impossible to put the capitalist system back to where it was before the War. We think it is impossible that world recovery can take place if the nations allow their affairs to be managed by groups of capitalists or of financiers, and we are against the theory that you can only run a business when you run it for private profit or gain. We want the Prime Minister to be true to his old faith and at that Conference to advocate the true international co-operation, of which he was so brilliant an exponent till within the last two years. We think that capitalism has done its job in the world and has now to be succeeded by co-operation. We believe that the piling-up of
usurers' debts is injuring the world and that you must. change that system in one way or another. Either it will be changed by collapse and revolution, or it may be changed by something very much worse, namely, the moral, mental and physical decay of your people, but we are quite certain that. you cannot re-establish that system on the old lines without real oppression of the masses and without squeezing out of them almost the last vestige of life.
When I think of the enormous powers of production, the enormous power of the machine, the enormous power which science gives to a handful of people, and when I think of the great masses of men and women who are denied the right to enjoy what these machines and science are able to give us—when I think of what their condition is likely to be under a new system, within which the world is made safe for plutocracy, safe for the monopolist, and safe for the moneylender, but unsafe and disastrous for the mass of the common people, I can only marvel at the idea that statesmen, knowing the facts, should sit down and try to bolster up the present system.

5.7 p.m.

Sir H. SAMUEL: The right hon. Gentleman who has just resumed his seat has suggested to the Government a number of interrogatories. I do not propose to add to those interrogatories or even to support him in addressing those questions to the Government, for most of the questions to which he asks for answers are the very questions which the World Economic Conference is to meet in order to solve, and the questions that he has addressed to the Prime Minister are almost as though the conversations which he has had with President Roosevelt had been the Conference.

Mr. LANSBURY: No. We all understand that those questions are to be discussed at the Conference, but what we want to know is what our Government, on behalf of this nation, are going to put before that Conference; and we have not had a word on that.

Sir H. SAMUEL: Very many of those questions are questions of extreme complexity and technicality, which cannot be expressed in a speech by the Prime Minister, or the Foreign Secretary, or the Chancellor of the Exchequer in a
Debate like this, and it seems to me that many of the questions that the right hon. Gentleman addressed to the Government could really only be answered in the definite propositions laid by the Government before the Conference itself, and finally by the resolutions or agreements which might emerge from the Conference. So I do not propose to address to the Prime Minister or to the Chancellor of the Exchequer any such questions on this occasion.
There have been some criticisms also of the Prime Minister's absences from this country for the purpose of these negotiations and conferences. I would venture to say that I think those criticisms are misconceived. The world is now interdependent to a degree to which it has never hitherto been, and it is absolutely essential that the Prime Minister of the United Kingdom and other representative statesmen should meet together, whether at Geneva, or at Lausanne, or at Washington, and by personal conversation try to unravel these hard, stiff knots into which the economic affairs of the world have been tied; and particularly is that so with respect to the relations between this country and the United States of America. The most close and cordial cooperation in all economic and political matters between the British Commonwealth of Nations and the United States of America ought, in the judgment of very many of us, to be the very keystone of British international policy, and the Prime Minister is entitled to the thanks, I think, of the Committee and of the nation for undertaking these arduous tasks and for the conversations which he has recently had with President Roosevelt. There is a well-known saying of Dr. Johnson's, that a man should keep his friendship in constant repair, and unless there are these personal contacts, conversations, and friendly interchanges of views, old friendships may fall into disrepair, to the great disadvantage of all parties concerned.
With respect to the present worldwide depression, this is above all the case—the need of co-operation between the United States and the other countries of the world. I have long held the view, and I think it is very widely shared, that the depression from which we are all suffering largely emanates from the
United States. As the British Broadcasting Corporation, the wireless, continually informs us, "a depression is travelling Eastward across the Atlantic." That is what in fact happened, and in particular the high Smoot-Grandy tariff in the United States, coupled with the payment of debts from Europe to America, together with the operations of the American Farm Board, which were intended to get prices up, but which have had the effect of bringing them down to a catastrophically low level—all these things have had the most serious repercussions upon Europe; and now, at the present time, we watch with the greatest sympathy and interest the vigorous attempts of President Roosevelt, for if they succeed in restoring prosperity to America, they will certainly succeed in restoring prosperity to all of us.
With respect to the debts, it is obviously right that they should not be the subject of negotiation at a conference of 60 nations. The matter can much better he discussed outside, among those primarily concerned, and I do not think that we can endorse the request of the Leader of the Opposition to the Government to say to-day what course they are proposing to take on the 15th June. The fact remains that the coincidence of the 12th June, the date when this great conference meets, and the 15th June, when the next instalment of the debt from this country to America falls due, is very unfortunate, and I sincerely trust that every effort will be made to relieve the situation before then.
We frequently hear the views of the American Congress on the Debt question. The House of Commons has been exceedingly reticent, and, I think, wisely so. All of us are most anxious not to embarrass the Government in any way in the conduct of what is necessarily a most delicate and difficult negotiation, and that feeling, I think, should be uppermost in the, minds of all of us to-day. At. the same time, I think it right that in this House the opinion should be voiced which is felt throughout the length and breadth of the country, that in our view our creditor should be willing to show an accommodating spirit. We are now almost the only country in the world which is fulfilling the financial obligations that arose out of the War. The ex-enemv States, almost all our former
Allies, and the Dominions are not paying their debts to us, and it is indeed hard that we alone, or almost alone, should be called upon to pay half-yearly these vast sums which are clue under our bond.
For my own part I feel the most intense repugnance to any idea of repudiation. We wish to maintain for the Government of Great Britain the highest standard of financial integrity and our reputation of not failing to do what we have undertaken. All the more reason that our creditor should, as I say, be willing to show a spirit of accommodation. This is an instance of the bad effects which follow from debts being incurred as between one Government and another, and I hope that, if some solution is found of this most difficult problem, it may result in any sums that may be payable being transmitted if possible in the form in which Governments usually pay interest and sinking fund on debts and that is as between a Government and its bondholders and not between Government and Government. If this debt or such of it as may remain, could be transformed from an inter-Governmental debt, into some form of publicly-issued obligations, whether in this country or in America, or in other countries, I feel sure that it would be to the advantage of international relations to remove this matter, if possible, from the political sphere as a matter between Governments, to the commercial and financial sphere in which Governments as a rule carry on their financial trams-actions as between a Government and its bondholders. That is all I wish to say on this matter today. As I have already observed, this feeling which is widespread, I am sure, in the House of Commons and in the country, has to be expressed with much discretion and reserve. Very much more forceful language might be used if our real feelings on the subject were to be freely and frankly expressed.
Another point which will come before the conference is the stabilisation of currencies—a most hard problem to face and to salve, and, indeed, in my view insoluble, unless the flow of commerce is set free to a. greater extent than hitherto. If the present restrictions remain, whatever efforts you make to stabilise currency, whatever parity you fix is liable to be upset and overthrown
within three months, six months or a year by the very fortes which have been operating and have upset the stability of the currencies of the world up to the present. A preliminary point has been raised with regard to the conference and has been referred to by the Prime Minister—the suggestion from the United States of a so-called tariff truce. But under the general designation of tariff truce is included more than a truce with regard to tariffs strictly so-called. As the Prime Minister has indicated to-clay, in that general designation is included the suggestion that all forms of trade restriction should, so to speak, be stabilised at the present rate and not increased during the term of the conference. There the Government have found themselves necessarily in a great difficulty because in these days they are busily engaged in imposing further restrictions. When the United States calls upon them to stay their hand they have to remember that day by day they are announcing fresh restrictions upon trade and fresh quotas, particularly in the sphere of agriculture and fisheries; and that if they were to accede to the American demand, literally and simply, they would disappoint many interests in this country in whose minds expectations have been aroused of immediate advantages, as they consider them.
The Government, therefore, are in a great difficulty. They have to-day announced that they have arrived at a compromise and that they will maintain the present rate and the present form of restrictions, whether tariffs or quotas, and add to them only in so far as they are already committed to do so, but that they will not undertake any fresh commitments. That, I understand to be the meaning of the Prime Minister's declaration to-clay, and it illustrates the essential contradiction in the Government's economic policy, a contradiction which I must dwell upon, because, unless it is resolved, it will make our Government impotent to give any lead in the conference and is likely to make the conference itself futile. It is suggested that the British Government have no policy to lay before the Economic Conference. I do not agree. They not. only have a policy, but they have two policies, and the two policies unfortunately contradict each other. The Prime Minister and the President of the United States issued a
statement at the termination of the conversations in Washington which included these words indicating measures to be taken by the conference:
There should be constructive effort to moderate the network of restrictions of all sorts by which commerce is at present hampered, such as excessive tariffs, quotas, exchange restrictions, etc.
That is the agreed programme for the Conference, and it follows, of course, the unanimous advice of the experts gathered together from all over the world to prepare the agenda of the Conference. That is the central proposal which they make. That is the problem which we are discussing to-day—Tuesday. But to-—morrow Wednesday—we shall be discussing, among other things, the Danish Trade Agreement which imposes a quota system for a period of three years, fastens it upon us in some respects, and upon Denmark in others, restricts Danish trade with the rest of Europe, and imposes certain obligations for the restriction of our trade for that period. Only yesterday there was announced another great system of quotas affecting one of the principal industries of this country, the fishing industry, which is to be put under a regime of restriction and regulation, with the possibility that imports from all the different fishing countries of Europe will be parcelled out, so that so much may be sent but nothing more. There are to be general restrictions intended for the assistance of the vested interests in fishing in this country.
Let us remember that the President of the Board of Trade has described the whole quota system as "insane" and "a curse to European trade." I have repeated those words several times and quoted them in this House, and the President of the Board of Trade has never replied. He has never said that the system is not insane and that it is not a curse to European trade, but he goes on gaily introducing more and more quotas week by week. This system is just as essential a part of the present Government's economic policy as the other and opposite proposal, endorsed by the Prime Minister and the President of the United States, of no restrictions. So, we have the Tuesday policy, advocated to-day, of removing restrictions, and the Wednesday policy, to be proposed to-morrow, of
maintaining and increasing restrictions, both propounded by the same Government at the same time as though they were compatible one with the other. That is the essential fundamental inconsistency of the Government's economic policy, and, unless they can clear their minds on these matters before the Conference meets, I am afraid they will cut a very sorry figure.

Mr. CHAMBERLAIN: The right hon. Gentleman does not seem to have noticed the word "excessive" in the statement which he has quoted.

Sir H. SAMUEL: On many previous occasions we have heard about "excessive" tariffs, quotas and exchange restrictions. I do not know whether the word "excessive" covers the exchange restrictions.

Mr. CHAMBERLAIN: It covers the whole.

Sir H. SAMUEL: In any case it appears to us that all these quotas are excessive. I do not know that the President of the Board of Trade when he described the quota system as "insane" and a "curse to Europe" was speaking of excessive quotas. He was referring to the whole plan, and he expressed his earnest hope that the German Government and the French Government would abandon the system. At the same time as he expressed the hope that other countries would abandon it, he himself was extending and enforcing it. As a matter of fact, that is a real dualism which must be, somehow, resolved. The German representative who went to Washington to continue the conservations on behalf of the German Government, Dr. Schacht, gave a broadcast address when he reached America in which he used these words:
There were two ways out of the present crisis. One was separation of the nations from each other leading to lower standards of living, the other was international cooperation for opening new markets. That was the choice—separation and poverty, or co-operation and prosperity.
I think that is true but while the right hon. Gentleman agrees that co-operation is a means to prosperity, these new restrictions and the whole policy endorsed by my right hon. Friend the Member for West Birmingham (Sir A. Chamberlain) is a policy for separation and
therefore, in our view, for poverty. My right hon. Friend the Member for West Birmingham—and this is relevant to the matter under discussion because it. touches the very essence of the problem of the World Economic Conference—engaged last week in very vigorous criticisms of the German Agreement which has been entered into by the Government. From his point of view, I thought the criticism was unanswerable. He said in effect:" The Government have appointed an Advisory Committee which is to be independent of Parliament and which proposes a certain scale of duties. Those duties are necessary in the opinion of that committee for the legitimate protection of certain trades. After the duties have been settled, and the trades under those duties are carrying on their activities and possibly increasing them, the Government come along and because it desires to engage in a Trade Agreement with Germany lowers the duties which have been declared by the properly constituted authority to he right and reasonable."
That is all true, and I do not see any possible answer to it. My right hon. Friend says, "You, by your policy, have excluded political pressure from Members of the House of Commons to raise the duties, yet you allow economic pressure from a foreign country to have effect in order to lower them." The right hon. Gentleman's constituents who make jewellery and the constituents of other hon. Members who make clocks, toys and similar articles have a perfect right to complain. But when my right hon. Friend goes further and says that this policy of Protection, with a tariff board. can continue concurrently with a policy of bargaining with foreign countries, there, I disagree. He said he was all in favour of bargaining and of negotiating with Germany and of assisting the coal industry and using our tariff in order to force down foreign tariffs. How are you going to do that if you are to maintain an adequate system of protection, in order to ensure, as my right hon. Friend thinks it will ensure, work for the British working men? He wants to see foreign manufactured goods shut out in order that the British working man may be employed. Yet he says he wants to have a higher fighting tariff which you can lower or raise according as foreign countries are reasonable or unreasonable.
My right hon. Friend avoids the essence of the matter. Either you let in some classes of German goods or you do not. If you let in some classes of German goods, then his primary purpose is defeated and the British goods are not made. If you do not let in those classes of German goods, what have you to offer to Germany in the way of a bargain in the interests of the coal industry? I should very much like my right hon. Friend, if he should be speaking in this Debate or some subsequent Debate, to say precisely what he would. offer to Germany as a means of bargaining and to other European countries that do not send us raw materials. Is there any class of German goods that does not compete with some class of British goods? I know of none of great importance, and, if that is so, his whole case falls to the ground, and he is convicted of a very obvious inconsistency. His policy contradicts itself. He urges the President of the Board ml Trade to engage in fresh negotiations with Germany for a general agreement. I frequently sympathise with my right hon. Friend the President of the Board of Trade in his present position, which I imagine is excessively uncomfortable, but I sympathise with him most when my right hon. Friend the Member for West Birmingham gives him such an impossible task as to enter into general negotiations with Germany for the advantage of British trade in Germany, while at the same time German goods are to he excluded from this country in the interests of British industry.
Some of us have been urging for more than a year that we shall get no solution on these matters so long as the mostfavoured-nation clause is maintained in our treaties unchanged. If, indeed, we can persuade the whole. world to adopt a large and simultaneous reduction in all their tariffs—a really effective reduction amounting almost to Free Trade—then indeed the most-favoured-nation clause could still continue to prevail universally. That would no doubt be the best solution, lit it is perhaps optimistic to think that that can be achieved. If we are going to have a group of low tariff and Free Trade countries, or any form of bilateral agreements such as those lately negotiated by the Government, we must then have a modification of the most-favoured-nation clause, or else restrict our agreements within so small
a compass that they are of extremely little value. That is what has happened hitherto. The most-favoured-nation clause as in these agreements make them so narrow and small that the advantage to British trade taken as a whole can only be regarded as little more than trivial. We have pressed this on the Government again and again, and so have my right hon. Friends who start from a different standpoint. The right hon. Member for Tamworth (Sir A. Steel-Maitland) and the right hon. Member for Sparkbrook (Mr. Amery) have urged it recently; Chambers of Commerce have taken it up, and last week the President of the Board of Trade at last reluctantly and belatedly indicated a change in his attitude. Until then he had been almost always obdurate in emphasising the advantages of the most-favoured-nation clause, but last week he said that the Government
will certainly not be prepared to continue indefinitely to accord full most-favourednation treatment to countries which show themselves unwilling to meet the reasonable requirements of this country in regard to the treatment of United Kingdom goods."—[OFFICIAL REPORT, 4th May, 1933; col. 1002, Vol. 277.]
I welcome that conversion, which I have been pressing for a long time, and I am convinced that unless that policy is brought prominently forward at the World Economic Conference it will not be able to achieve very large results in the sphere of tariff reductions.
There is another point which is referred to in the statement of the Prime Minister and the President to which attention has not yet been drawn in this Debate or, so far as I know, outside the House. There was a remarkable and important sentence in the declaration of the Prime Minister and the President:
Enterprise must be stimulated by creating conditions favourable to business recovery, and Governments can contribute by the development of appropriate programmes of capital expenditure.
That is very remarkable coming over the signature of the right hon. Gentleman, because hitherto, whenever we have had Debates in the House on unemployment and from all quarters the Government have been urged to bring forward large and important programmes of capital development, the spokesmen of the Government have replied, in the first place,
showing how dangerous these are, and, in the second place, showing how little employment is given by what they call "relief works." In every way they throw cold water on the whole policy of capital development. It is true that the Prime Minister has said that if Members will bring forward schemes the Government will be prepared to tabulate them and give them consideration. I think that there has been more tabulation than con-. sideration hitherto. At all events, very little has been done, and instead of forming, with vigour, energy and initiative, large programmes of capital development which would give employment to vast numbers of people, the Government have adopted a negative attitude and there has been nothing visibly (lone to carry out this policy.
I hope that now that the Government have accepted the principle of "appropriate programmes of capital expenditure" we shall hear very soon in the House of Commons what those programmes in fact are. When I asked a question on this point a few days ago the answer was given that all the matters in the declaration at Washington were inter-related and that no ore Government could act by itself. No definite reply was given to my question as to when programmes would be submitted. I submit to the Prime Minister that there is no reason why, in this particular matter, any one Government should not act independently of the rest. Most of these questions are international and interrelated, but just as President Roosevelt in the United States is himself putting forward, with great vigour and energy, large programmes of capital development, so in this country there is no reason why the same policy should not be followed independently. Many of us have been in favour of this policy for some years past. In 1931 it had to be suspended on account of the financial crisis and the impossibility of borrowing money, and the need above all of restoring financial credit and not incurring fresh loans, but now that the situation is so different the policy should be changed and a different course should be adopted.
I am glad to think that the Government are gradually adopting a policy that has been pressed upon them for some time past from various quarters. They are realising at. last four things. First, if each country excludes imports of foreign
goods they would destroy world commerce, and by destroying world commerce they would destroy the interests of that country itself. This applies as much to the United Kingdom as to any ether country. We see the folly of it when it is done by Australia, by the United States or by Ireland, but when it is done by ourselves we think it extraordinarily wise. Secondly, the Government now by their declaration are beginning to realise that if they insist upon the exclusion from this country of foreign goods they cannot bargain with foreign countries by admitting their goods. The two are essentially incompatible. Thirdly, so long as the most-favoured-nation clause is maintained unchanged it is impossible to negotiate satisfactory reductions either with a group of countries or with particular countries. Fourthly, a programme of capital development, which many of us have urged insistently for so long, is the right policy according to the declaration of the Prime Minister and the President.
If these views had been adopted earlier and acted upon, much loss would have been avoided, and we should have had a greater advance towards world recovery. Now these principles have been grudgingly admitted, but will they be acted upon'! That is now the test. Well meaning declarations by Prime Ministers and Presidents, or programmes drawn up by experts, or even resolutions passed by international conferences are not enough. What matters is action. Tuesday's policy of liberation is so far only a policy of words. Wednesday's policy of further restrictions is a policy of action. The moral of this is that until this wiser policy is translated into action it ought not to command the support of the nation, and it will not help the recovery of the world.

5.41 p.m.

Sir A. CHAMBERLAIN: I had not foreseen the course that the Debate would take when I came down to the House to-day. I understand that the right hon. Gentleman the Leader of the Opposition had asked for a further opportunity to discuss the Prime Minister's visit to America. My right hon. Friend the Member for Darwen (Sir H. Samuel) has taken the opportunity to make a reply to a speech which I made in the House last week. Even the right hon. Gentleman the Leader of the Opposition seemed less anxious to discuss the Prime Minis-
ter's visit to America than to cross-examine him about the coming World Economic Conference, and, above all, to repeat what he has so often repeated, though with a variation of language which I admire, his deep conviction that there is no cure for the world until all the nations of the world which repudiate his views have come to accept them. That may be so, but that, I think, will have to be the subject of another international economic conference and will hardly be the result of the present conference.
I may have a word or two to say on other matters, but I rise to call attention to one matter in the Prime Minister's statement to which neither of the right hon. Gentleman who preceded me has made any allesion. It seemed to me by far the most important thing that he said. My right hon. Friend knows that I welcomed the announcement that he was going to America at the invitation of the President of the United States, and that I recalled a previous visit which he had made to the previous President. I paid him a tribute fm the success which had attended that visit, and I hoped for the same success for the present visit. Without taking any decision--and the Prime Minister told us that before he went that he was not going to take any—I think that he does accomplish a great purpose, nationally and internationally, in having a full and free exchange of the kind which he explained to us to-day of views between himself and the head of the American Government. We all of us know of problem after problem for which we need international co-operation in order to secure a solution, but the first step to international co-operation between one nation and another is that the representatives of both nations should understand one another's difficulties and what it may be possible for them to do and what it may not be possible for them to do.
I trust the Prime Minister has made clear to the President the limits beyond which no British Government can travel, just as he has opened up to his vision the roads along which we might go far to meet what we understand to be American or other foreign opinion. But the right hon. Gentleman brought us back the statement that the President had announced his willingness, if a satisfactory disarmament convention could be
reached, to arrange for America to take part in consultative pacts for the purpose of greater security of the nations so disarmed, and to make those pacts definite and authoritative and operative. That is the best news that has come to Europe from America for many a long day, and, if it is not an impertinence for me to do so, I desire to express my deep appreciation of the consequences which that decision of the American Government may have upon the peace of the world, and to congratulate my right hon. Friend that he has been able to give us that assurance.
It is of consequence, too, though to my mind of lesser consequence, that another result of the conversation should be agreement between the Prime Minister and the President that they could not bring the Economic Conference to such a satisfactory issue as both desired and both felt necessary without a settlement of the question of international debts. I do not think it is very reasonable for the Leader of the Opposition to press to know how exactly that settlement is going to be brought about, or to ask if there is to be another conference. There may be a great many people here who may confer or not on all subjects on the agenda who may also take the opportunity to discuss other things at the request of their Governments and perhaps to reach agreements about them, but it is not necessary that it should be done in that way. I understood the Prime Minister himself to indicate that that was one of the ways in which it might be done, but other ways are open. The important thing is the recognition that we cannot settle our economic troubles without first settling the question of international debts. The number of nations interested in these questions of international War Debts is much smaller than the number of nations interested in the World Economic Conference, and let us hope that, being a smaller number, they will find fewer hours necessary in order to reach agreement.
That really is all I wish to say on what I had understood to be the subject of the Debate, but I must turn for one moment to the speech of my right hon. Friend the Member for Darwen. As he concluded, I could not help regretting that the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) had already left the
House. What pleasure it would have given him to see how quickly his appeal for a little more ginger had worked in the bosom of the Liberal party and to hear my right hon. Friend the Member for Darwen, a Minister in a Government which told us not to borrow, who said that reckless borrowing was one of the great causes which had brought us to the brink of disaster, and over the brink, converted in 48 hours, under the dulcet tones of the wizard of Carnarvon, to recommend again an unlimited expenditure of borrowed money.

Sir H. SAMUEL: I am sorry to deprive my right hon. Friend of the pleasure of his jest. I do not expect him to do me the honour of studying my speeches, but he would have found exactly the. same thing said in a speech of mine in February, and again in the Debates in the House on unemployment.

Sir A. CHAMBERLAIN: I am afraid I have not followed as closely as I ought to have done the speech of February or the later speech to which my right hon. Friend alluded. What was present to my mind was a number of speeches which he made in support of that policy when he sat where the hon. Member for Bridgeton (Mr. Maxton) sits now, and the haste with which he had abandoned it when he joined His Majesty's Government. But my right hon. Friend was not content merely to give satisfaction to the right hon. Member for Carnarvon Boroughs. He was anxious to prove that the President of the Board of Trade and I were pursuing different policies. I am sorry to disappoint my right hon. Friend the Member for Darwen, but lie is mistaken. We are pursuing the same policy, but we had a little difference the other day about the methods to be employed. I thought that the duties fixed for particular industries by the Import Duties Advisory Committee ought to be treated as a minimum, and that the basis of negotiations should be, to use my own words, "This is our most-favoured-nation treatment for those nations which give us comparable treatment: and unless you give comparable treatment to us you cannot expect most-favoured-nation treatment in return." Here is my right hon. Friend saying that the Government and I are pursuing two incompatible ends, and in the same breath he takes credit
to himself by saying: "For years I have come to the conclusion that the most-favoured-nation clause as now administered has been a sham. Thank goodness the President of the Board of Trade, however dilatory, and all too late, has at last said that he cannot bargain on the basis of the present interpretation of the most-favoured-nation treatment and that most-favoured-nation treatment cannot be given to those who will not make a satisfactory bargain in return."
I hope I do not misrepresent my right hon. Friend the Member for Darwen in that. That being so, he and I stand on the same footing. The only question is: What is the most-favoured-nation treat-moot? I want the most-favoured-nation treatment to be the duties as estabEished by the Advisory Committee, and he wants most-favoured-nation treatment to be no duties at all. But the principle of bargaining, the compatibility of the things which we are pursuing, is the same whether you take his basis or mine. May I ask, since obviously I have studied my right hon. Friends speeches insufficiently, when he first carne to the conclusion that the most-favoured treatment was no use? I do not remember 30 years ago, when the tariff movement was launched, and that argument appeared in countless tariff 'speeches, that we had any support from my right hon. Friend. If the right hon. Member for Carnarvon Boroughs is, as I think he has reason to be, pleased with the progress which my right hon. Friend is making, I also have reason to be pleased, and beg that he will go on in the same path.

5.55 p.m.

Mr. GRIMSTON: In his speech the Prime Minister made the statement that a permanent settlement of War Debts is a thing we have to aim at. There are many ways of achieving that permanent settlement, and it is from that point of view that I wish to make a few remarks. There is an opinion abroad, I think it is held in many quarters, and I see a mention of it in the "Times" to-day, that enforced default on the part of the debtor is the only course which is left today. If that is an opinion which is held at all largely in this country, I must confess that it fills me with dismay; because what is our position in this matter? We have forgiven many of our
Allies, we have forgiven enormous sums in war debts. We have also entered into the Lausanne, Agreement, and there is attached to that "the Gentlemen's Agreement," and I think every one in the House will realise that it is practically impossible, and certainly impracticable, for us ever to reclaim the sums which we have given up under that agreement. That is a further direction in which we have made colossal sacrifices. It seems to roe that it would be grossly unfair if the most generous creditor in the world were forced in the cad to incur the stigma of default because in many directions it is the view that enforced default is all that is left to the debtors. For my part I would desire to fight most strongly against anything of this kind happening.
There are two sides from which I wish to look at the question, the moral side and the business side. When we paid the last instalment of debt I recollect, that the Chancellor of the Exchequer, in defending that course, said that to default would offend the moral sense of our people. I thought he was perfectly right, and I think a default to-day would offend the moral sense of our people as much as it would have done then. But there is the business side of it. Many of our debtors, many of those who owe us money, have, during the course of this depression, been malting valiant efforts to meet their obligations. I refer not only to foreign nations but to our own Dominions and Colonies. They have been making those efforts and making them successfully in many cases, and the result has been that even during last year we received a very large income from abroad, far in excess of the sums which we are still under covenant to pay yearly to America. What will these debtors say to themselves if we, still having the means to pay, decide to get out of this trouble by defaulting to the United States of America? Can it be supposed that they will still continue to make the same efforts to pay us? I very much doubt it. It would be very much the same as if a small debtor were owing something to a great business house in the City of London and found they were defaulting. He would consider that he had every moral right to default himself, and so it would be with our debtors. If I may put it so, we have been the high priest of finance and financial integrity in the past, and if we fall from that pedestal we are
going to be the biggest losers. That is the business side of it.
The Committee are freely entitled to say: "What will you do about it?" Here, ass the right hon. Member for Darwen (Sir H. Samuel) has done, I cannot help reminding myself and the Committee that during the post-War years the course which our friends the United States have adopted has not been calculated to be in the best interests of the world, or, in fact, in the long run, of themselves. I am well aware of the appeal which the Prime Minister made that we should be discreet, but if one is candid with one's friends at times it does no harm. There would be very little difference of opinion on that point.
Coming back to what we should do if the United States is unwilling to meet us, I would say to her: "Our financial integrity is a very valuable asset to us. It is a thing with which we are not going to part lightly. If you insist upon these debts being paid, we shall do our best to pay you for as long as we can, but at the same time, in order to make that possible, it will be necessary for us to curtail imports from you to as large a degree as we can." This, I suppose, is where I should very shortly be ruled out of order by the Chair, because the question would become one either for the Treasury or the Board of Trade. I have said enough to indicate that in my view, which I believe would be very much backed up, how we have power to take a very firm line in order to avoid any necessity of default on our part. Any settlement based on the lines of repudiation would be absolute disaster. Should the negotiations unhappily fail, and I hope that they will not fail, I am perfectly certain that the Government would have the nation behind them in taking a firm line in order that they might not lose that most precious thing, which we have built up for many years, our financial supremacy and integrity.
I am reminded of the visit which Lord Snowden paid, I think it was to Belgium, shortly after he became Chancellor, and he took a very strong line on behalf of this country. I well remember that when he came back he had a great ovation at Liverpool Street railway station. I think that a firm line would be backed up by this country. I wish, on this point, to appeal to the Govern-
ment, should it become necessary to take this firm line, that something might not be done which I am certain we should regret in time to come, and which, on balance, would not tend to the greater happiness and prosperity of this country.

6.3 p.m.

Sir ROBERT HORNE: The hon. Member who has just sat down has made an important contribution to our Debate. At the beginning of his speech he referred to the way in which we ought to meet our obligation to America in respect of War Debts. I am sure that everybody in the House will be ready to echo his hope that this country will not be drawn into a position of default, and will be equally ready to support the view expressed by the right hon. Member for Darwen (Sir H. Samuel) that only in the very last and worst circumstances should we be guilty of repudiation. That would be very awkward and embarrassing for a great creditor nation such as we are, and even more than that, it would be, I am sure, a severe blow to our pride throughout the whole of our history.
I would like to refer to the speech which we have had from the right hon. Gentleman the Member for Darwen. It was inevitable, of course, that the right hon. Gentleman should deal with the question of tariffs, and equally inevitable that he should give us those views to which we are becoming accustomed on that subject. It is difficult to understand why the same point of view is always presented without any variation, no matter how different the circumstances are. My right hon. Friend seems to think that you can only have one of two sets of circumstances; either you must tax everything that comes into the country or you must tax nothing, whereas, in point of fact, every nation which has developed a scientific tariff system, taxes those things which it suits them to tax and puts no duty on those things which they wish to have in free. Equally, my right hon. Friend seems to think that every Protectionist in the country wishes to destroy all foreign competition. As long as I have been a Tariff Reformer I have never shared that view. I am perfectly willing to see this country compete with every country on fair terms, but the attitude that we have always taken is that, where you are compelled to maintain a wage-scale immensely in ex-
cess of that which is paid by your competitors, it is only fair to protect the standard of life which your people enjoy.
The last of the supposed dilemmas, very easy dilemmas, which my right hon. Friend put, suggested that it was entirely inconsistent for the Government to agree to a system for reducing excessive tariffs and at the same time to be negotiating tariff treaties. Surely it is obvious to everybody that we had never been able to get other countries to take the slightest interest in reducing tariffs until we put on our own tariff. Our position to-day is one in which we are still far from the high-water mark of tariffs, as they exist in other countries, but as a result of the moderate tariffs we have imposed we are in a position to deal with other countries and to negotiate treaties which will be of service to this country. In no wise do those treaties make it impossible to make bargains with other countries in regard to import duties which suit them. I leave the point, thus cursorily dealt with, in order to take up the main theme with which we are concerned to-day.
It is true, as the Leader of the Opposition has told the Committee, that the Prime Minister has divulged to us to-day nothing that was not in his speech of last week, except that momentous declaration with regard to the future attitude of the United States of America in relation to the violation of the peace arrangements which have been made. Apart from that, the Prime Minister has been able to tell us nothing. The reason is not far to seek. It is quite impossible that he should be able to divulge the conversations which, for the very reason that they were so confidential, have been—at least as I believe—of such high importance. Therefore we are left, so far as we ourselves are concerned, to puzzle out the situation and to try to arrive at some idea of what is happening. The situation has been rendered infinitely puzzling by the departure of America from the Gold Standard.
I hope that the Committee will forgive me if for a moment I try to present the situation as I see it. America for some considerable time, certainly until the Hoover Government fell, was engaged in a policy of credit expansion. That policy did not have the full success
that it might have attained; indeed, it did not prove very effective in any degree, but mainly for three reasons. The first reason was that the policy was not persisted sufficiently, but that from time to time there was an apparent cessation of the efforts to expand the credit of the country. In the second place, and this is more important than the other, the banking system of America proved too weak to stand the strain under which it acted; and the third reason was that, because of that bad condition of the banking system, the credit which it, was sought to create never got down to the pockets of the people. For those three reasons, and because of the lack of confidence which was created in America, the policy of credit expension may be said to have proved ineffective.
With the advent of President Roosevelt's Government, there was a wave of confidence which undoubtedly helped the situation in America a great deal. The banking system was still in the feeble condition which I have described, and he immediately set about to put it on a stronger foundation. Before there was sufficient time to effect any real reform, a crisis arrived and, as the Committee will remember, very many banks entirely failed to meet their obligations, and very many others had to be closed. This brought about a condition of crisis which had to be dealt with by drastic measures. Already all the primary producers of America were in difficulties through not being able to realise sufficient returns for their production to meet their costs, and especially to meet the costs of the money which they had borrowed in better times. To that situation was added the difficulty that, as one knows, there are to-day banks closed compulsorily in America which are responsible for 5,000,000,000 dollars of the deposits of the people, and accordingly many hundreds of thousands of people, who were already unable to meet their obligations in full, have been subjected to a new catastrophe, which made the situation absolutely intolerable.
The President took what was, no doubt, a very drastic step—he suspended the Gold Standard. It is worth while, if the Committee will forgive me, looking at the phraseology which he used in explaining why he took that coarse of action. He said that the Administration
has the definite objective of raising commodity prices to such an extent that those who have borrowed money will, on the average, be able to repay that money in the same kind of dollar as they borrowed. We do not seek to let them get such a cheap dollar that they will be able to pay back a great deal less than they borrowed; in other words, we seek to correct a wrong, and not to create another wrong in the opposite direction.
That brings home to this House, and we have had repeated discussions upon this point, the very principle which has been so often enunciated by several of us in the course of those Debates, and we have proof, in the case of the American Administration, of the very evil that we feared. People in the heyday of prosperity, when they got a high price for their crops, borrowed money. Take the case of the American grower of wheat. He finds, in recent years, that he has had to produce three bushels of wheat instead of one, to pay for the debt which he incurred in better times. That is only one illustration, but it applies to the whole range of primary production. Perhaps I might, from recollection, tell the Committee that the value of the production of wheat at to-day's prices is far less than half of what it was in 1929.
Again, the value of the profits of the great corporations of America, which was a huge sum in the year 1929, is now replaced by a great loss. The effect of the failure of the primary producer is disastrous to the man who is making machines, because the purchasers of his machines are, in a great agricultural country like America, very largely composed of those who produce the primary products, and, accordingly, you get this distress spreading through the whole community, ending up, as we know, with the largest number of unemployed people that there is in any quarter of the world. That is the intolerable situation from which President Roosevelt is trying to redeem that great community, and he has taken the action of abandoning the Gold Standard, with the immediate result of an increase in prices which, beginning with a flicker, has now attained quite appreciable dimensions.
I entirely agreed with my right hon. Friend the Member for Darwen when he pointed out the effect that prosperity in America had on other countries, and,
undoubtedly, what has happened there has stimulated a rise in the prices of commodities in this country, a result which we, with our cheap money policy, were perhaps unable to attain alone. I always thought that we did not do enough by ourselves, but in any case it is clear that we may feel confident that we can attain it when we have the two great producing areas, the United States of America and the British Empire, acting upon a common policy. I say acting upon a common policy for this reason, that I understand our object to be exactly the same as that at which America is now aiming. I would recall to the Committee the fact that the Macmillan Committee laid it down, as one of the essential factors in future progress, that prices should be restored to something like the 1929 level, and I would remind the Committee, further, that this policy was accepted by the Chancellor of the Exchequer. I have it in my recollection, also, that at Ottawa exactly the same policy was laid down, and perhaps I may be allowed to read this statement, which resulted from the deliberations of the Financial Committee at Ottawa. One of the most important conditions precedent to the re-establishment of prosperity is, they say:
A rise in the general level of commodity prices in the various countries to a height more in keeping with the level of costs, including the burden of debt and other fixed and semi-fixed charges.
I say that it is a hopeful situation when you find that the United States of America and the British Empire are now acting on one common policy for the purpose of raising the wholesale prices of commodities. That could never have been, or, at least, it could never have attained its possible fruitfulness, if America had not departed from the Gold Standard, but, now that it has done so, I think we may look forward, on the principle of unity of action which has been recently enunciated, to better things. This leads me, going beyond what the Prime Minister actually said in his speech, to remind the Committee that there was issued last week a communiqué from Washington, which expressed the conclusions at which the President and our Prime Minister had arrived. Those conclusions are as follow:
The necessity for an increase in the general level of commodity prices was recognised as primary and fundamental … The central banks should by concerted action provide adequate expansion of credit, and every means should be used to get the credit thus created into circulation. … The ultimate re-establishment of equilibrium in the international exchanges should also be contemplated. We must, when circumstances permit, re-establish an international monetary standard which will operate successfully without depressing prices, and avoid a repetition of mistakes which have produced such disastrous results in the past. In this connection the question of silver, which is of such importance in trade with the Orient, was discussed, and proposals were tentatively suggested for an improvement in its status.
That is a programme the objects of which are that commodity prices should be increased so that they may be able to meet production costs and yield a fair margin of profit, that this object should be attained by a system of credit expansion through the concerted action of the central banks in both countries, and that we should seek to reach an international monetary standard, at the same time getting rid of those things which have brought about disaster in the past, that is to say, those elements which rendered the Gold Standard in the end unworkable. It is a programme upon which, as I have said, our two countries are United, and, so far as I am concerned, holding the views which perhaps I have expressed at too great length from time to time in the House, it makes me more hopeful to-day than I have been at any time during the last thre eyears.
There are people who are afraid of what is called a competitive depreciation in currency, and that, undoubtedly, would be a subject for fear if we were so insane as to let is happen. I am not surprised that some people entertain some apprehensions on that subject, because what has been written in journals on both sides of the Atlantic has revealed that this idea prevails in some people's minds. Undoubtedly there have been people in America who entirely misunderstood the object and effect of our Exchange Equalisation Fund, and have attributed to those who are managing that fund a desire always to keep the pound in a position in which it would destroy the chances of people doing business on the basis of the dollar. That has never been, as we know, the object or desire of anyone in this country.
On the other hand, there are people here who fear that, partly as a result of speculation and for other reasons, our pound may rise to a level at which it would be impossible for us to do profitable business.
So far as the immediate future is concerned, if, greatly Oaring, I might do so, I would venture to lay down a policy for both countries in this form: We are both convinced that some stability in the level of prices must be obtained. Both countries are convinced that certain measures must be taken to bring that about, mainly through credit expansion. Our object is entirely the same. What each of us, therefore, should aim at, is to have our currency on a basis of exchange which would enable each country, with the means and resources which it possesses, to carry on its business upon a proper and a profitable footing. Perhaps I might use the phrase which was used by the Chairman of the Westminster Bank at the dinner at which he spoke last night, when he said that the basis of exchange for us should be fixed at such a level as was compatible with our means and prospects. It is this objective at which both countries should aim, and neither of them need in the process be regarded as in any sense competing in depreciation with the other.
There was a reference to the question of silver in the passage which I have read from the speech of President Roosevelt, and, if I might be allowed to do so, I should like to refer to that for a moment. It is not merely the party at present in power in America that has taken up the question of the importance of silver in the monetary system of the world. President Hoover, before he went out of office, laid stress, I think in his last address to Congress, upon the status of silver as being of great importance to America and since the Prime Minister left Washington President Roosevelt has been given very remarkable powers by Congress in this regard. He has been given the right, at his own discretion, to take payment from the debtor countries of their debts in the form of silver, up to an amount of 200,000,000 dollars, with silver up to a price of 50 cents an ounce. I think that to-day its price is roughly 34 or 35 cents an ounce. In the second place, he is to be entitled to issue currency as against the silver
which he buys, and which would be coined into silver dollars. It is probably well known to the Committee that already a very considerable amount of American currency is issued against coined silver dollars in the United States Treasury. In the third place, he is to be entitled to fix a ratio, if he chooses, as between the value of silver and the value of gold, which, as the Committee will understand, would leave him free to introduce a complete system of bimetallism such as America enjoyed up to the year 1873. Further, President Roosevelt himself, in the passage quoted in the "Times" this morning, refers to the difficulty that America had under the Gold Standard, with its gold bonds that had to be paid in terms of gold. He adds:
Nevertheless gold, and to a partial extent, silver, are perfectly good bases for currency.
I have referred to the power given to the President to take payment of international debts in silver. I do not think I am repeating anything that ought not to be told when I say that I suggested, before our last payment was made to America, that silver should be offered in payment, and I am naturally pleased to see now that that was an idea which certainly would not have been disagreeable to America. But I would ask the Committee to realise how important from our point of view such a suggestion is. America has always said, and with a certain amount of truth, that part of the depression in the world is due to the fact that our policy of going completely away from the Silver Standard in India, and taking up a Gold Bullion Standard, had had the result of impoverishing the East and checking purchases which China and India would otherwise have been making. That is the complaint that America has always made against us. As the Committee probably know, the Indian Government have at the present time a very large amount of silver overhanging the market, which always keeps the price depressed, because no one knows when the Indian Government will come in to sell their silver. At the present time there is roughly in the Indian Treasury something like 400,000,000 ounces of silver, and of that they could probably part with 300,000,000 ounces. They probably could not part with more, because at least a part of their issue of notes at
the present time is based upon silver, but they could part with, probably, 300,000,000 ounces, and that amount, at the price at which America is now prepared to value it, would give India a price which it has never had a chance of realising for a long time past.
There is no better way in which India could be served at present than if this country were to purchase her silver, giving her sterling in return for it which would form a nucleus for her Central Bank, while we transferred that silver to America in payment of our debt. You may say this means that we are committing ourselves to paying the American debt. What I say in reply to that is that, whatever happens about the American debt, and no matter how much it is cancelled, there will still be an appreciable sum to pay. You cannot imagine America letting Europe off with less payment than that which we exact from Germany, which is a sum of £150,000,000 under the Lausanne arrangement, and accordingly it is certain that we shall have something to pay. This 300,000,000 ounces of India's silver at 50 cents will represent $150,000,000. There is no doubt at all that it would be a great relief to us to pay in silver and it would be of great benefit to India that her silver should be got rid of upon these terms. Accordingly, while the Prime Minister was not in a position to reveal the intimate conversations which he had with President Roosevelt, nevertheless as one of the results of those meetings it is for us a very significant factor that there appears in the powers given to President Roosevelt the right to take this step which is of such vast importance not merely to us and to India, but, as the Americans think, to themselves in reviving a trade which has been so diminished and decreased in China. We sent a delegation of business men to China a few years ago and in their report they made this statement:
The continued depreciation in the value of silver has enormously reduced the purchasing power of China. In our opinion every means should be sought for bringing about the stabilisation of silver and so of restoring to China her full purchasing power. Only by international agreement can this result be attained, and we feel that Great Britain should take a leading part in endeavouring to secure such agreement.
I state with confidence that at a time like this, when it is possible that by the
united action of Great Britain and the United States some favourable turn may be given to world prosperity, there is nothing which will give so quick a stimulus to the trade of the world as an increase in the purchasing power of India and China. Silver in these countries is at an abnormally low level. It is probably represented by about a third of the price at which these people made their savings. The Committee will understand that, if anyone finds his fortune reduced by two-thirds of its previous value and the prospect before him is that the other third may diminish to a figure which will completely impoverish him, that obviously has the worst possible effect on his desire or ability to purchase goods. Accordingly, I hope that the Government, in dealing with this matter, will take up a rather different attitude from that which the Chancellor of the Exchequer adopted when we last discussed it. He fell into one or two errors, on which I am not going to expatiate to-day. In the first place, he underestimated the amount of silver available in the world and, in the second place, he took the amount that would be available as against all the gold known to exist in the world and said it was an inappreciable quantity. He entirely forgot that what is of importance is the anoint of gold that is in circulation, that he was bound to subtract from the amount of the existing gold all that was sterilised in the hands of a few countries, and that the amount of influence that silver would have on being brought in to supplement gold would be in the proportion which it bears to the amount of gold in active circulation.
I hope the Government now proposes to look at this subject with more sympathy. I am not going to dilate upon what forms the arrangement might take, whether you would go in for a system of bi-metallism, such as President Roosevelt has been given the power to instal, or whether you would make silver a part of your reserve against the currency that you issue. It is certain that, if you bought silver at the market price to-day and made it part of your reserves, so far from depreciating in your hands you would have an asset which would be growing in value rather than lessening. Nor is there any reason to fear that you would have any such great production of silver as would make a
glut in the market. Finally, I should like, as my right hon. Friend the Member for West Birmingham did, to say that I believe that the Prime Minister in his visit to America has achieved a very great success. Anyone who reads between the lines of President Roosevelt's pronouncements can see the influence which Great Britain has exercised. These personal contacts which the Prime Minister has made lave, I am sure, been invaluable. Re has sensibilities and intuitions derived from his Highland origin which are not given to the ordinary man and in his contacts with statesmen of other nations has rendered very great service to the country. I, for one, feel confident that great progress has been made in our relations with America and, without casting any reflections upon any other nation, I am sure that it is by united action between our country and the United States that success in restoring prosperity is to be achieved.

6.34 p.m.

Sir J. SIMON: The actual question before the Committee is that my salary should be reduced by £100 and I, therefore, feel that the occasion is one when I should be justified in intervening, although the speeches that have already been made have to a very large extent answered one another. The Leader of the Opposition took the line that the Prime Minister had said nothing at all. He was sufficiently answered by the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) who said, I think with the general approval of the Committee, that what the Prime Minister had been able to say at the opening of the Debate was most significant and most encouraging to all of us who look forward to promoting economic peace and good understanding throughout the world. Then my right hon. Friend the Member for Darwen (Sir H. Samuel) made a contribution which the Government were very grateful to receive but, in so far as he had any criticisms to make and any references to his own past declarations in support of those criticisms, it would be only seemly that I should leave him to the tender mercies of my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George). Subject, however, to this pairing off of different points of view, there are two or three
matters on which questions were put and on which some additional explanations may be offered.
First, as to what has been called the tariff truce. I was a little surprised that the Leader of the Opposition wanted to know what a tariff truce was. He seemed to think that it was a phrase that was used with reference to some arrangement to reduce the existing level of tariffs. He was a colleague in a former Government of a very distinguished man whose absence we sincerely deplore. When Mr. William Graham was President of the Board of Trade, he attempted to negotiate a tariff truce. The circumstances were very different, and I hope the results will be very different, but the thing itself was the same. I understand by a tariff truce an agreement between members to the truce that, subject to certain exceptions, qualifications or what not, they will, for the period of the truce, undertake not to put up the tariffs that are at present imposed. If you are about to enter into an economic discussion with the different nations of the world, it is obviously most desirable to do something of that sort, if you can, or else every nation, in anticipation of the day when the economic discussions begin, may be tempted to put itself in what it would think a better negotiating position by increasing every sort and kind of tariff and obstacle that it can invent in order that it may be able, with a great show of grace and reasonableness, to have something to take off when the day of discussion comes. Therefore, it is in principle, I should have thought, an eminently practical and desirable ideal to pursue. It has the further advantage that it is not calculated unduly to disturb the situation, to rock the boat, just when everyone is preparing, as well as they can, to enter into these difficult negotiations, so that they are not taken by surprise at the last moment.
May I remind the Committee of an analogy? When we went to Lausanne and the Prime Minister presided over that important conference, the success of which no one disputes, we found it necessary, before proceedings began, to enter into negotiations and to secure an agreement between the principal parties assembled there for the express purpose of keeping the status quo for the period of the discussions. We started the
Lausanne Conference with an agreement which we negotiated and signed on the very morning on which it began, and which provided that, although the date might arrive on which a particular payment became due or a particular receipt might be expected, the whole status quo should be preserved for the period of the discussion in order that we might be able to get on with our business.
That, in principle, is the idea of a tariff truce. The reason why Mr. William Graham's well-meant efforts did not avail are at this time of day quite beyond dispute. It was not because he was not an ingenious and a persistent man, very well qualified, if ever man was, to conduct and carry through successfully a negotiation of that character. As a matter of fact, though he approached seven countries of Europe and made his contribution with the greatest clearness that there should be a tariff truce for two years, nothing ever happened except that he indicated that we would subscribe to the suggestion if only other people would do the same. Why? It is perfectly plain that the reason why, with all his skill and ingenuity, the late William Graham could not bring about a tariff truce was because everybody knew that the policy of this country at the time was so firmly set along a particular economic line that in no circumstances whatever would the Government of that day recede from their position.
I have never concealed from any audience at any time that in my view there are immense arguments in favour of an international Free Trade position. Here is one of its defects—in negotiating with any chance of success anything like a mutual arrangement with other countries as to whether we have a tariff truce or not. My right hon. Friend the Member for Darwen who, to the general regret, thought it necessary to leave the Government, and his friends, asserted that the Ottawa Arrangements to which he had an objection would prevent any negotiations of this character. I ventured to say that I hoped that the time would not be far distant before he would find that the Scandinavian countries and the Argentine and others would be corning in and entering into negotiations with us. These negotiations are now leading to tariff arrangements. [Interruption.]
Does the right hon. Gentleman object to it? I feel sure that if the right hon. Gentleman has anything of which to complain, he does not object to an arrangement which limits the amount of tariff to be paid, and as regards the present tariff truce, I am sure he will warmly support it. We are endeavouring to secure that in the interval, before the Economic Conference opens and during the period of the discussion at the Economic Conference, we shall not, have the whole situation observed and the idea of securing good economic relations affected by the intemperate, nasty, selfish imposition of tariffs and restrictions, but that at the very least we shall keep things as they are. That was the reason why my right hon. Friend the Prime Minister made the statement the other day which he quoted, and which I will repeat, pointing out to President Roosevelt,
how different is the position of a country like our own from that of those which are already high tariff countries, with policies of economic defence already fully worked out and in operation.
That is to say, that it is all very well to call a halt, but it does not by any means follow, at the moment when a halt is called, that the comparative levels between countries with high tariffs and countries which have not high tariffs are levels to be preserved ad infirtitum. He went on to say:
Whilst I welcomed the idea of a truce during the period of the conference, I made it plain that its application would have to be subject to the safeguards which this difference in our position requires.
As we know, this effort to prevent the misuse of the period before the opening of the conference and the period of the conference was proposed by the United States. The Prime Minister has shown himself in principle in favour of the proposal. The form which it will take, with due regard to our own interests, and the special interests of each country concerned, is under discussion and, I believe, is very likely to reach agreement. So much for the tariff truce.
The next matter which I note is a declaration made by the Leader of the Opposition, which, undoubtedly, was of very great importance, because he made it, not only on behalf of himself, which in itself would be important, but on behalf of his party. He spoke for himself and his friends, and for greater accuracy
I have procured the actual passage from those who report these things as they are being said. He referred to the proposal, which many people favour, of making the best effort that can be made by international means to raise commodity prices, and I desire before the Debate ends to put quite clearly on record the view of the Leader of the Opposition and his friends on the subject of raising commodity prices. He began by observing, quite justly, that there is a difference between wholesale prices and retail prices, and a great lag between them, as there often is. He said:
In any ordinary civilised society that would have been dealt with long ago, hut it has been allowed to remain.
I do not discuss the facts that would justify the difference between retail and wholesale prices. I admit that there is a large gap—nowhere, in the world at the moment is the gap greater between retail and wholesale prices than in the case of the products of Soviet Russia. He went on to say:
It is true that the raising of world prices in one way or the other might affect the people who are called the rentier class, or the moneylenders as I prefer to call them, and it is also absolutely true that the people who will pay most owing to the raising of prices are the great masses of working people.
We may take it, then, that the view of the Leader of the Opposition and his followers is that they are not supporters of the effort by international means to raise commodity prices, because they take the view that if such an event happened it would injure the great mass of the working people. In order that that may be made doubly plain, I will quote one other passage from the speech of the Leader of the Opposition this afternoon, in which he said that there are great difficulties in knowing how to raise commodity prices, but of this he was quite sure:
I am quite sure, however, that if it is done, it will be the working people who will have to pay.
At any rate, I may be permitted to observe that that is not everybody's opinion. I hold in my hand, for example, the report of the experts who formed the committee appointed by the League of Nations to make a preliminary study of the problems which might be expected to come before the Monetary and Economic Conference. It was, undoubtedly, a body of most exceptional authority. It con-
tained certainly some of the best-known authorities on this sort of subject in the world. It produced a report which was entirely unanimous. It was not limited to people appointed by countries which are members of the League, but included very distinguished members of the United States. I read these sentences:
The unprecedented fall of commodity prices in recent years has caused a growing disequilibrium between costs and prices, has immensely increased the real burden of all debts and fixed charges, has made business more and more unprofitable, and has resulted "—
I would ask the right hon. Gentleman to give ear to this—
in a continuous and disastrous increase of unemployment throughout the world.
I think that before the Debate ends we are entitled to have an authorised view from hon. Gentlemen opposite. I am sure that we all recognise their devotion and sincerity in endeavouring to find ways to reduce unemployment throughout the world. Here is the unanimous view of people drawn from different parts of the world who certainly speak with great authority on the subject, and they held the view, which I thought was held by every educated man on the subject, namely, that the fall in commodity prices had inflicted a great injury upon the purchasing power of vast masses of people, and that thereby had most materially prevented the free sale of goods and had reduced the employment of great masses of labouring men. Is that the correct view or is the correct view that put from the other side of the Table this afternoon by the right hon. Gentleman the Leader of the Opposition in which he says, "Oh, no, that is quite wrong. By raising commodity prices you are only going to inflict another injustice upon the working classes of this country?"

Mr. J. JONES: Hear, hear.

Sir J. SIMON: A very old friend of mine still takes that view. At any rate, they are certainly taking a view repudiated by every authority of which I have ever heard, and which I thought until this afternoon was repudiated by the Labour party itself. We are willing to join on that issue, and the right hon. Gentleman is at liberty to say to anyone he pleases that the Government are going to do their utmost, in co-operation with other countries in the world at the
Economic Conference, to see whether the disastrous fall in commodity prices cannot be stopped, and if it is not possible to devise means by international action by which the level of commodity prices may be raised. I think that I have the full authority of my colleagues when I say that we suffer under the delusion, which is common to all experience, and every economist of standing of whom I have ever heard, namely, that the fall in commodity prices has done great injury and a great deal to increase the mass of unemployment in the world.
The Leader of the Opposition made reference to the Prime Minister's account of what had passed during his visit to America, and more particularly as to the care which the Prime Minister exercised in stating what was to be the exact position and attitude of this Government and this country in the approaching discussions. We appeal to the good sense of the House and to the common sense of our fellow-countrymen. If you entrust a Prime Minister and a Government with the handling of matters so anxious and so difficult as, let us say, the problem of debt, does any sensible man, whatever his politics, really expect a Prime Minister who has been discussing those things with the President of the United States to come here, when they are still under discussion, and proceed to make an elaborate statement of the exact position and the exact method by which they are to be dealt with? Anybody who protests against unreasonable concealment of matters which have become established facts is well justified in doing so, but it is a wholly different proposition to call upon those who are resporsible to make a declaration on what they have been urging and considering and been trying to get considered, when it is admitted on all hands that no bargain has been made.
Anyone who recalls the facts knows that before the Prime Minister went co America he made it entirely plain to the House and to the country that he did not go there to get a bargain. I very well remember that, before my right hon. Friend left these shores, some of us, considering 'what we should do when he came back, pointed out this fact, and we were well conscious of it, that he was not going over there with authority to make a bargain. The Opposition would have been the very first to object if he had made any sort of bargain. He was bound to
come back, after doing his best, without a bargain. It was emphasised t o all of us that when he came back he would be exposed to every form of reproach. "What have you done for trade?" "What have you brought back?" I think that the House of Commons and the country are satisfied that the view taken by my right hon. Friend the Member for West Birmingham is the statesmanlike view, and that the fact that the Prime Minister has been able to make the declaration he has made, standing alone, is an abundant justification of his having gone to America.
Let me point out, in confirmation, what is the language employed by President Roosevelt, I think in a broadcast the other day, after these conversations he has had with the Prime Minister. We know that my right hon. Friend tells us he has reached a very large measure of agreement in sympathy, outlook and approach with the President of the American Republic, and after the Prime Minister left there was the broadcast delivered by the President of the United States. This is what he said, and if we treat this as not only the objective of the United States of America, but the objective of the British Government, too, if this has been the consequence of these discussions, I ask any hon. Member whether something worth doing has not been achieved? President Roosevelt said there were four great objectives:
(1) A general reduction of armaments and through this the removal of the, fear of invasion and armed attack, and at the same time the reduction of armament costs in order to help in balancing Government Budgets and the reduction of taxation.
I think we will all agree with that
(2) The cutting down of trade barriers in order to start the exchange of crops and goods between the nations.
(3) The setting up of a stabilisation of currencies in order that trade can make contracts ahead.
(4) The re-establishment of friendly relations and greater confidence between all nations.
If that can be proclaimed to the American people after the visit of our Prime Minister to Washington as the common objective being aimed at by these two statesmen not only for their respective countries but the whole world, I do most firmly and boldly claim that the action which is being challenged here to-night is justified, and that we have every reason to
be glad that it has had that most fruitful result.
My last point is the relation between the debt question and the Economic Conference. I will not, of course, go beyond the position which the Prime Minister took up with great deliberation. I would be the very last to move a single step further. Let me just remind the Committee again of what the Report of the Expert Committee appointed by the League of Nations states. Many good things are to be found in their report. If lion. Members will turn to page 7 of the report, where it deals with the general programme of the Conference, they will find this:
The programme of reconstruction which we deem it necessary for the Government to undertake is set out below.
There is a very elaborate programme below. Of this programme the experts say:
The problem of inter-governmental indebtedness has not been included, because it lies outside our terms of reference.
That is well known to everybody. It would be the height of absurdity to call 60 or 65 nations together that they might discuss so difficult a task as inter-departmental debts. which at the most concerns, say, a dozen nations primarily affected. But the experts go on:
In our opinion, however, it is essential that this question"—
that is the question of inter-governmental indebtedness—
shall be settled and that the settlement shall relieve the world of further anxiety concerning the disturbing effects of such payments upon financial, economic and currency stability. Until there is such settlement, or the definite prospect of such a settlement, these debts will remain an insuperable barrier to economic and financial reconstruction. We therefore attach the greatest importance to the early resumption and successful conclusion of negotiations upon this problem.
There are also the sentences where they say:
In stressing the necessity for concerted action we do not wish to suggest that nothing can be accomplished before the Conference meets. On the contrary, the success of the Conference will depend in great measure upon the vigour with which the participating Governments enter upon preliminary negotiations in the meantime.
If we wish a reason for the Prime Minister's visit, there it is. The experts further say:
The prospects of substantial all-round success in the necessary complex and multilateral conference discussions will be greatly enhanced if, in the intervening months, preliminary negotiations have cleared the way for reciprocal concessions.
I have endeavoured to deal with some of the matters which have been raised in this Debate. I would ask the Committee to show their confidence in the policy of the Government by restoring to me this beggarly £100.

7.6 p.m.

Colonel WEDGWOOD: I object to this Government. I think they have injured the trade of the country with their tariff. I think they have increased the number of unemployed by their economics. I think they have consistently supported the creditor, as against the debtor, in currency matters. If, however, there has been one comparatively bright spot in the conduct of the National Government it has been, in my opinion, their conduct of foreign affairs. Although I fully approve of reducing the salary of the Foreign Secretary, I have no desire to reduce the length of his life or of his stay here. If he delays for one moment his exit, I shall indicate to him that the views expressed by my right hon. Friend the Member for Bow and Bromley (Mr. Lansbury) this evening on the evil effects of inflation, which he marked down and reprobated so severely, are precisely the views he himself expressed only three years ago, and when he swept the country, only two years ago, and which I myself have unfortunately set in print. Yet he knows now that they were wrong. I know they were wrong, and the right hon. Gentleman beside me will, I feel certain, take presently what I call the recent neo-economic view on this little question of inflation versus deflation. Perhaps, rather than base himself on expert economists, who can always be hired on either side, I may put the point in a way in which he himself will completely understand—the admirable healing power of what we call reflation.
If we raise wholesale prices, the rentier will be cut. The moneylender, if prices are raised by 50 per cent., will lose 33 per cent. of his purchasing power. It is true that that will affect the poor, fool
worker also, but the difference between the two is that the rentier cannot get it back, but the worker, by decrease of unemployment, gets it back in increased wages. Let me point out to the right hon. Gentleman what is a fundamental doctrine of the Socialist party. I am pleased to be able to state it because I am not always regarded as quite orthodox, but on this I am absolutely orthodox. I base myself on Karl Marx, and in his economics Karl Marx is absolutely correct. He said that there was a definite and iron law of wages; that wages were not governed by the value of work done but, sooner or later, by the cost of subsistence; that, as the unemployed grew in numbers, whenever there were two men for one job, these two men automatically undercut each other's offer of wages, and wages tended to sink to subsistence level.
It is a realisation of that truth which brings me to agree to the urgent necessity for cutting clown those debts incurred when prices were twice what they are to-day. Unless we cut down these debts, we can never recover prosperity for our trade and get the unemployed back into productive work. The best cure for low wages is a large demand for employment or an alternative of self-employment. The restoration of prices to the 1929 level should be aimed at by statesmen to-day. Because I believe that I am content to see prices raised, because only so can the working classes recover their right o their pay.
To the bootmaker everything is leather. To the right hon. Gentleman the Member for Hillhead (Sir R. Home) everything is silver. I do wish he would leave silver out. It carries no conviction. When he is dealing with the general issue of the raising of prices he does carry conviction, bur, directly he gets to silver, and the raising of the price of silver, I hate him. What I object to is his breaking the united front.
We want to get prices back to 1929, and not silver to the 1873 price level. I have no sympathy with him on that issue. The real issue is to get prices back. I think the Government want prices back, and I am quite certain that President Roosevelt and the Americans want prices back. We have never had a statement from the Front Bench as
clear and definite as President Roosevelt made in the "Times" this morning—a definite demand to raise commodity prices so that the creditor that lent money shall not get back the increased value due to the fall in prices, but shall get back the same sort of dollars as he lent. This argument, stated with perfect clarity by President Roosevelt, has never been stated with perfect clarity by our own Front Bench. To-day we do not know whether the Government are going into this International Conference with a clear view of what they want, or whether they are, just like Mr. Micawber, waiting for something to turn up. If we are going without a plan into conference with America, which has a plan, and with all those goldless nations which have plenty of ambitions but no gold, then the nation that will come out of that conference carrying the baby will be the British nation. The right hon. Member for Derby (Mr. T. H. Thomas) went to the Ottawa Conference with lots of plans, but he came back with precious few sheaves. He went out there refusing to consider matters of currency, and he came out without any scheme even for stabilising sterling. Ever since, New Zealand and Australia have gone down one way and Canada has gone up the other way. Ottawa may have bound the Empire together with tariff bonds but it resulted in no currency and in diverse values of sterling throughout the Empire.
The Prime Minister has enough sense to get into touch with America and to understand their position; and I want him, from a knowledge of what America is after, to be quite clear of what we are after. We really want to get prices back to the 1929 level. That involves reflation. There is no way of getting out of it. It has, of course, any number of objections. There are the objections raised by the hon. Member for Farnham (Sir A. M. Samuel) and others.

Sir ARTHUR MICHAEL SAMUEL: The right hon. and gallant Member would clear up for himself my position as well as his own if he would define what he means by getting up prices. Does he mean prices of primary commodities? I do. He must remember that our position is quite different from that of America. We have only one raw primary commodity, coal, but they have a large number of raw primary commodities. If he
puts it into my mouth that I wish to put up the prices of secondary commodities, I disagree, as I do not know how we are then going to sell our commodities in the export market.

Colonel WEDGWOOD: The hon. Baronet will have an opportunity of making the usual speech later on, and he will be able to show that all the trouble in the world comes from America. Have hon. Members observed what is happening in Germany? Everything that has gone wrong in Germany is put down to the Jews. Now, if we ate to judge from the speeches of the hon. Baronet and a good many other hon. Members, the whole mess that civilisation has got into in the collapse of prices is due to America. It is always due to somebody else. It is about time we did some clear thinking on our own and tried to see if we could not do something to put things right, rather than saying, that it is always the fault of the other chap. There is lack of clear thinking of what the increase in prices mean, how much it affects the various interests of the moneylenders, the rentier, the landlords and the working-classes, and how it can be brought about whether by individual action, by national action or international action. It is because we have never thought clearly on that point that we have no national plan. Inflation has its drawbacks. Of course it has, but if you are going to try to make on omelette without breaking eggs, you are going to try for something that is hopeless.
This is a scheme for a reduction of the indebtedness of the world and will mean that those who have lent money will lose purchasing power, while those who use it will have a chance of snaking profit out of their borrowings once more. The Americans by a stroke of the pen are reducing the value of the dollar, we will say by 25 per cent. Other things being equal it is mathematically certain that the reduction in the value of the dollar by 25 per cent., whether they call it the "Roosevelt" or the dollar—will mean that prices, measured in that depreciated currency, will rise by 25 per cent. That means that every single person who has a fixed income will lose 25 per cent. of the purchasing power of that fixed income. That is to be done because only by making that sacrifice will they be able to restore trade and, what
is more, only by making that sacrifice will those who have lent their money be sure of getting any interest on it.
What is the alternative? We have either to bring down costs or to raise prices. Bringing down costs has been advocated by the right hon. Gentleman opposite in a letter to the "Times," and he begs the manufacturers of this country to cut their costs lower. If they cut their costs to the bone they can scarcely get them any lower. We cannot get costs down any more except by driving wages down further, and that means driving down the weakest wage earner. The alternative is to put up prices, and it is in order to do that that we should be prepared to make this sacrifice. Do not let hon. Members misunderstand me This is, in form, a capital levy upon all wealth. It is done partly in order to restore trade and partly in order to avoid individual bankruptcy here and there. There are few manufacturing firms in this country that are not in the hands of the bankers to-day. The bankers themselves are in favour of some such scheme as this, because the alternative is individual firms going bankrupt. When an individual firm goes bankrupt it means that the family is smashed, the work-people are thrown out of work and the stock is sold at slaughter prices, competing with other people, bringing down their prices and producing bankruptcy elsewhere. That is what we are up against in this country, in America and daresay in the rest of the world. America has met the position by a clear-cut plan, and I ask that the Government of Great Britain shall have as clear cut a plan in order to meet an exactly similar situation.
The difficulty which the Government are facing in America, and which has not yet been faced in this country, is that the question of inflation depends upon the relative value of the pound to the dollar. The Americans wish the pound relative to the dollar to be as high as possible. The higher it is the more will they be able to sell American goods in this country and the more will English goods be excluded from America. Therefore, it is in the interests of the American Government to go into this conference for the stabilising of currencies to get as low a value as possible for their dollar with regard to
the pound, and it is just as much important, in fact more important to see that we should have a low value of the pound relative to the dollar. We are a far bigger exporting nation than America and far more dependent upon our export trade. Although a low dollar would mean that we should get our food supplies more cheaply, the injury to our export trade from the rise of the pound relative to the dollar which has taken place recently is far more important to us and far more ruinous to our trade.
Hon. Members who talk in the country about Tariff Reform do not realise that we have had an automatic 50 per cent. tariff on all goods coming from other countries, but the rise of the pound relative to the dollar that has taken place has already toned down that tariff and at the same time put up the tariff on our exports. Therefore, it is necessary that we should go into this conference with a clear knowledge that it is the British interest to keep the pound low relative to the dollar when stabilisation takes place.
I do not want stabilisation. Everybody seems to have come back to the idea that it is a good thing to get back to gold. I do not want that. I prefer the annual balance that comes from exports and imports and investments and income. I would call the attention of the House to the certain danger, almost the certain collapse, of any system of gold stabilisation that may be enforced by the International Conference. Let us assume that we all go back to the Gold Standard, with the gold content of the dollar, the pound and possibly the franc written down. The Argentine will go back to gold, and Japan will go back to gold, but at a lower gold content than their old currency.
It is obvious that what will happen when we stabilise on that basis will be that Great Britain as usual will go on balancing her Budget, spending nothing and putting everything by that she can. On the other hand, it is conceivable that America will not be so anxious to save. They have an ingrained habit of buying on the credit system and of giving out money to farmers and army pensioners even more extensively than we do in this country. They may not balance their Budget. It is certain that there is no European country which will balance its
Budget. It is certain that as unemployment grows in each of these countries, not only will a balanced Budget become more and more difficult, but the way out will become ever more obvious. Having done it once, why not do it again? France is already thinking of doing it again. Germany is thinking of doing it again, depreciating again, being driven off gold again, or going off automatically.
Having once seen the advantage of depreciating one's currency below that of other countries, it will be very difficult to insist on stability for ever on any basis that may be agreed to in June, July, or whenever the World Economic Conference meets. I want to put that danger forward because I do not want people to talk about everything being put right when the World Economic Conference has once more restored currency at a lower gold content. I do not want people to imagine that that is a good thing. The way has been shown hew to get rid of debt. The new method is so patent that your stabilisation on a gold currency can never work for long. We had better rely and continue to rely, as we have done during the last two years, on the natural play and interplay of supply and demand.

7.30 p.m.

Mr. SOMERVELL: With much that the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) has said most hon. Members of the House will agree, except perhaps those who sit upon the same Front Opposition Bench. I wish to deal with a slightly different aspect of world problems than that with which the right hon. and gallant Member has dealt. It is one which I think is equally important, but its position in the World Economic Conference is not, I think, quite so clear. It is clear that the Economic Conference is intended to deal with a reduction of excessive tariff restrictions and quotas, and so on. The right hon. Member for Darwen (Sir H. Samuel) asked the Government to resolve what he suggested was an inconsistency in their policy. The inconsistency can be resolved, perhaps not to the right hon. Gentleman's satisfaction, in this way. There are many of us who distinguish between tariffs and quotas of one kind and tariffs and quotas of another kind. There are many of us
who believe that certain tariffs and regulations on commerce, such as those foreshadowed to be undertaken by the Minister of Agriculture, are good, and if properly used will take a permanent place in the organisation of trade between different countries of the world. The idea that markets should be left open at any time no be flooded with increased commodities or manufactures from any part of the world is an idea to which the world will not revert, and some form of regulation by tariffs or quotas will be a permanent feature of the future organisation of trade.
But undoubtedly there are tariffs and restrictions which do not usefully control the flow of international trade; they clog and hinder it. Some people believe that where tariffs and restrictions clog and hinder trade it is due mainly to the fact that the statesmen who have introduced them have not sufficiently studied or, having studied them have, like the President of the Board of Trade, forgotten the teachings of Adam Smith and those who propounded Free Trade doctrines in the past. I do not take that view. If one surveys the international relations of the countries of the world, the economic relations, they fall into two broad heads. There is the commodity or trade relation between countries of the world, and there is the financial or loan relation between countries of the world. I believe it is because these two grottos of relations have got quite out of touch with each other, do not fit in with each other. If you superimpose one upon the other you will find that your loans of indebtedness do not correspond with what is the possible or natural flow of trade products and services between one country and another.
In the nineteenth century we lent money to the Argentine for development, for the building of railways. It was done by people here who had money to invest. They said, "Here is a railway development, a new company, let us put our money into it." That would have been a fatal thing for them to do had it not been that contemporaneously the growing population in this country wanted more wheat and more grain from the Argentine, which the railways, built by this money, enabled the Argentine to send us. To some extent it was an axiom in the nineteenth century that the financial and loan policy of banks and private in-
dividuals in this country kept in step with trading and commercial needs and the policy of traders of this country. Although there were occasional breakdowns in prices in the nineteenth century the two positions never really got quite out of step. Now, I believe, they are completely out of step. War debts are referred to frequently and everyone agrees that they should be dealt with. But ought we not to go a little further and say, why are war debts hindering trade; why do we want them out of the way? The reason is that creditor countries under war debts are adopting a trade and commercial policy which makes it impracticable, almost impossible, for debtor countries to pay.
After the Franco-German war it was generally accepted that the Reparations payment imposed on France did her little or no harm because Germany was willing to accept payment of reparations in a way which France was able to pay. That particular war debt was liquidated without any harm being done to the country which had to pay. The particular situation which arises between countries of the world now is a situation with which we are wholly unfamiliar in our private and domestic relations. We are familiar with people going bankrupt, but we are quite unfamiliar with a creditor refusing to be paid; and that is, in effect, what creditor countries are doing who will not accept payment in commodities or services. If you could get hold of an omnipotent statesman and give him an infinitely efficient statistical bureau what he would set himself to do first would be to make what I may describe as a commodity survey of the nations of the world. He would find that one country had a surplus production, a certain surplus, which it could put into the world's pool, and certain imports which it needed for the satisfactory employment of its people at a reasonable standard of life. Another country, less developed, would not have a surplus to put into the pool; it would need to take more out of the pool than it put in. It would need loans from other countries for development. Having made that commodity survey he would make a financial loan survey of the nations of the world, and he would say to those countries: you cannot, and you will not, get any currency system going, you cannot,
and you will not, get trade flowing again profitably, an interchange of goods between one nation and another, until your financial and loan position As something which your natural flow of commodities can deal with and liquidate.
Unless the World Economic Conference can go behind the mere formal existence of tariffs and restrictions and quotas, and trace those which are bad and are really impeding trade, unless it can get down to the roots of the problem it will have little chance of setting the world upon its feet again. I understand, as everyone must, that War Debts as such cannot properly be on the Agenda of the World Economic Conference, but the reason why it is necessary to get rid of War Debts must surely be open to the fullest discussions. More than that, there are no doubt many immediate problems to be dealt with but we must look to the future as well as to the past, and unless in the future there is some machinery to see that what I have called the commodity position and the financial and loan position do not get out of step again, as they have in the past, the solution will not be permanent, and we shall shortly be back in the same position in which we find ourselves to-day.

7.40 p.m.

Mr. BERNAYS: The hon. Member for Crewe (Mr. Somervell) and myself are at any rate agreed in this, that we are both working for freer trade, and that, after all, is the policy of hon. Members on these benches. I agree with the hon. Member that it may be a long time, perhaps never, before we get back to a system of complete Free Trade, but we are anxious to examine every proposal, and see whether it does or does not make for freer trade throughout the world. That was the reason why we resigned on the Ottawa Agreements. The Foreign Secretary was a little unfair to the right hon. Member for Darwen (Sir H. Samuel) when he suggested that we said that the Ottawa Agreements would entirely prevent tariff agreements with foreign countries. We never said anything of the sort. We said that they would limit the manoeuvring ground—and they have done so. There is not a Minister of the Government who will say that these Agreements at Ottawa have not been a difficulty in arranging agreements with foreign countries. We have
discovered that in the meagre tariff arrangements which have so far been made.
That is the way in which we have to examine the truce which has been proposed by the United States Government; will it or will it not make for freer trade? It has been said that to call it a truce is a misnomer, that it is not an agreement to call off hostilities but only an arrangement not to extend our front. But even so it is a great advance. After all, one of the great objections to tariffs is their instability, and if you remove that instability you remove some of the objections to them. In any case, it is a great advance that America, which has the most elaborate network of tariffs in the world is coming forward with these proposals. I wish His Majesty's Government could see their way to give them a more generous welcome than they have. The Prime Minister in his statement this afternoon said he could only deal with the conversations in a tentative and noncommittal way. I am afraid that he has accepted this tariff truce in a tentative and non-committal way. He says that he cannot accept the idea of a complete truce, there must be reservations, but that during the progress of negotiations there will be no initiative.
What does he mean by "no new initiative"? Does it mean that during the process of the Economic Conference there will be no negotiations for further trade agreements? Do they further mean that while the Conference is sitting there will be no order from the Import Duties Advisory Committee. It is important that we should have some answer to these questions in this Debate. If the answer is that the trade agreements are to go on, that the Tariff Advisory Committee are to continue to make recommendations, I cannot see how any useful result can come from the World Conference with regard to tariff reductions. The right hon. Gentleman the Foreign Secretary said that these reservations have the full support of the United States. There is a statement on the tape machine this afternoon from the Exchange Agency that does not bear out that statement at all. This is what it says in a message from Washington:
Great Britain's unwillingness to lend support to Washington's tariff truce sug-
gestion has aroused some measure of resentment among the officials of the Government in Washington.
Why need there be any reservations at all? After all, it will be only for a few weeks that the World Conference will be assembled. Surely it is not asking for very much that the Government should say that during that time we will not directly or indirectly increase our tariff barriers. I hope that in making this plea to the Government I shall have some support from the members of the Conservative party. Many of them argue to me that they are not convinced Protectionists, that they are really as much Free Traders as I am. When they make those arguments they always seem to dig me in the chest with their pipes—a most irritating form of political gesture. They say that they are as good Free Traders as we are. Well, then, surely it is time for them to prove their declaration. Many of them admit that they were not elected as Protectionists, that their appeal to the electors was twofold, one for a protective tariff and the other for a tariff to get greater Free Trade. Were all those arguments just a sham?

An HON. MEMBER: Did you support a tariff?

Mr. BERNAYS: I refused to promise to vote in any circumsances for a permanent tariff. I took my stand on the Grey letter, and said that I would support Any emergency proposal, but was against a permanent tariff. What are to be the proposals of the Government? What is their plan? Are they, or are they not, going to fight for freer trade? On 8th February of this year I put to the Prime Minister this question:
Will the Prime Minister give an assurance to the House that at the forthcoming Economic Conference the efforts of the British Government will be directed to the removal of tariff barriers, which are now universally admitted to be one of the main causes of the distress of the world.
And the Prime Minister replied:
Yes, Sir."—[OFFICIAL, REPORT, 8th February, 1933; col. 172, Vol. 274.]
Is that pledge going to be implemented, and if so how? The right hon. Gentleman the President of the Board of Trade, speaking on 15th March on certain conditions which were necessary before we entered a low tariff group, said:
Within those limits we are ready to consider any proposals that may be put forward."—[OFFICIAL REPORT, 15th March, 1933; col. 2028, Vol. 275.]
But have we got no proposals? It is argued, why should we take the lead? The stock-in-trade defence of the Government is that since they have been in office the position has proportionately deteriorated less here than in any other country in the world. If that is so, and it probably is, that position does entail on us certain very definite obligations. It is argued that tariffs are of comparatively little importance compared with trade restrictions, currency restrictions and the like. But you cannot isolate the two. Both currency and tariff restrictions result from the same economic mercantilism, the absurd theory that exports are good and imports are bad. If that idea is to be pursued at the Economic Conference the venue of the Geological Museum has been well chosen, because it is as dated as the fossils that will look down upon their deliberations.

Mr. HALES: Are you suggesting a permanent adverse balance of trade?

Mr. BERNAYS: The hon. Member is on a different point. I am not talking about an adverse balance of trade. I hope the Government realise the overwhelming importance of this Conference. Are they going to stand to their pledges, to stand up to the hostile section in their majority and ask for freer trade? The difficulty is that the history of these crises seems to show that Governments act only when they are frightened. It was not until the bankers' crisis in America that action was at last taken. It was not until it was realised that money was pouring out of this country in 1931 at the rate of £1,000,000 a day that the National Government was formed. There is plenty of cause for alarm in this country. The Government sometimes argue as if the position was stationary. It may be said that unemployment is slightly going down and trade slightly improving. But unemployment remains stabilised at the appalling figure of 2,500,000, and although you may stabilise unemployment you cannot stabilise human misery, for it is very much more uncomfortable to be unemployed for a year than to be unemployed for six months.
I suggest that the position in the country is definitely getting worse, that it is a matter of urgency. Anyone who speaks, as I do, for an industrial constituency, must be alarmed when he goes up and down the streets. The other day I was watching a school emptying at the end of the morning's work. That was in my constituency. I definitely came to the conclusion that the children were less well nourished and worse clad than they had been a year ago. That was a very serious reflection. I thought possibly that it was only a personal impression, and so I tried to get some statistical proof. I looked up the figures as to the meals provided for necessitous children in Bristol. I discovered that whereas the number of meals supplied to necessitous children in 1932 was 127,000, for the year ended March, 1933, it was 207,000, an increase of nearly 80,000. The number of children who received meals at some time during the year 1932 was 1,480, and in 1933 it was 2,300. Yet we in Bristol are fortunate in escaping the worst of the economic blizzard. We have a variety of industries and are not dependent on one factor of employment. If the figures are like that in Bristol, they must be worse in many other constituencies. The fundamental cause of this is surely all the restrictions on consumption. Trade restrictions are reaching such dimensions that they are bringing foreign trade to a standstill. The intercourse of man with his neighbour is being throttled. Now is the supreme chance to end this slow suicide. I hope the Government will rise to the heights of its opportunities.

7.55 p.m.

Mr. RICHARD LAW: My hon. Friend the Member for North Bristol (Mr. Bernays) appealed to Members of the Conservative party to co-operate with him in impressing upon the Government the extreme urgency of the forthcoming World Conference, and the extreme importance which the Government ought to attach to that conference. I am sure that nearly all the Members of the Conservative party will join with the hon. Member in that request to the Government, or would join if it were necessary; but I think that we have very little need to suppose that the Government are not as aware as we are of the urgency of the question. A great majority of Members of the House have decided that the conference next month is really the last
chance that we shall have of doing what we in this country have been trying to do ever since the War, and sometimes with great sacrifices, that is restoring the old system of international trade.
We tried first by the Debt settlement of 1923. That settlement failed in its object, and most people will agree that it involved us and the world in very considerable sacrifices. It put upon us a burden which we have not been able to bear, and it put upon every nation in the world the burden of a rigid and inexorable system of inter-governmental payments of War Debts and Reparations. It is true that those payments of War Debts and Reparations existed before the settlement of 1923, but they were still in a fluid form, and they could still be modified. That settlement which was entered into with the idea of making a great step back to the old conditions of international trade which had existed before the War, was the first step taken in that direction, and it failed.
We took another step in the same direction by going back to the Gold Standard in 1925. That, too, was enormously expensive to the people of this country. That too failed. It added tremendously to the difficulties of our trade, particularly our export trade, and there is no doubt that it added tremendously to the figures of unemployment. But it failed. There again was an attempt to get back to the old system of international trade which existed before the War. Now we are engaged once again in an attempt to get back to that system, and, if this attempt fails, not only shall we have wasted, for no purpose whatever, all the sacrifices which we have made in the last 10 years, but we shall be face to face with the immediate collapse of the present system, even in the dwindling form in which we still have it to-day.
We are all agreed, I think, that we must have a success of the Economic Conference, and I think it is worth while asking ourselves what we mean by success in this connection. The Prime Minister indicated to-day that the Government would demand a parallel solution of the Debt question and that they regard it as an essential quality in any success which the World Conference might have. That is one very obvious element in its success, but, if we look
through the sort of things that we expect from the World Conference, they all fall back in the last resort upon the United States of America. I do not believe that the British Government have any very great contribution to make at the Conference, and I do not think that they should have. I think the main cause of the contraction of internal trade, which is the characteristic of the post-war years, has been the policy of the United States of America, and one can say that without any offence to America, because obviously the Government of the United States have already realised that that is the case, and the people of America are beginning now to realise it. The success of the World Economic Conference will be measured by the extent to which the American Government and people are willing to reverse what has almost become their traditional economic policy since the War. It seems to me to follow, therefore, that our Government have a very great duty to perform, but that duty is here and now rather than at the Conference itself; and the duty of the Government, which I am sore they are undertaking wholeheartedly, is to do everything they can to back up the President of the United States of America in persuading his own people to accept the policy which he has accepted in his conversations with our Government and with other Governments of Europe. The Government and we in this House should do everything we possibly can to support the President's hands at this moment, and we should do nothing which may be likely to weaken his hands in his dealings with his Congress and his people in the United States.
In the last few days the position of the President of the United States has become very much weaker than it was. Until a matter of perhaps a week ago there was no doubt at all that President Roosevelt occupied in the United States a stronger position than any President since the War. He seemed to have got command of the people and to be in a position in which he could override Congress and appeal to the people over the heads of Congress, but in the last few days there seems to have been a weakening in his position and a consolidating of the opposition to him in Congress; and I am very much afraid that the reason for that is that, rightly or wrongly, the American people have got the notion that
we are not really going to co-operate with them so closely as the Prime Minister has led the President to believe. I do not think there is any ground for that notion, but it makes it essential that the Government, and particularly the Conservative supporters of the Government in this House of Commons, should make it clear to the American people that we do accept, whole-heartedly, the tariff truce which the American Government propose.
We, the private Members in this House, ought to do or say nothing which would gives the impression to Congress and the people of the United States of America that we are trying to stretch the qualification which the Prime Minister made, and the President accepted, that we were in a special position. What the Prime Minister said to-day, and what the Secretary of State said later on, should have done a, great deal to clear up any misapprehension of that kind that may exist on the other side of the Atlantic. At the same time, we, the Conservative Back Bench Members, should do or say nothing to try to force our Government to make some concession to our natural Protectionist leanings, a concession which may be misinterpreted in the United States and give the opponents of President Roosevelt there an opportunity of saying, "It is no use trying to co-operate with the British, because they will not cooperate with you."
There is one other point to which American opinion attaches very great importance—and I think there is some misapprehension in that direction also —and that is the question of the Disarmament Conference. As the right hon. Member for West Birmingham (Sir A. Chamberlain) said this afternoon, perhaps the most important item in the suggested programme which has been agreed to by the President and the Prime Minister is the new conception of neutrality which the American Government was willing to accept. The whole of Europe, including ourselves, has spent the last 10 years bewailing the fact that we could not get the United States of America to undertake any kind of responsibility with regard to European affairs and with regard to any treaties or pacts. This endorsement by President Roosevelt of the Stimson conception of neutrality is a tremendous advance on
anything that has come before from the United States, and I would suggest to the Government that it is an advance which they ought to welcome, not only because it is good in itself, but in order to give the American people the assurance that this concession on their part—and it is a concession from their own traditional view—is appreciated by us in this country.
It is a little unfortunate that the Prime Minister has found it impossible to go to Geneva. I do not want in any way to under-rate the magnificent work which has been done there by the Under-Secretary of State, because I, in common, I think, with most Members of the House, have admired his work there in the last few weeks very much indeed. At the same time, it seems to me to be a little bit unfortunate, in view of the gesture which has been made by the Government of the United States of America to our point of view and the European point of view, that our representative at Geneva at this critical time should be, not the Prime Minister nor the Secretary of State, but the Under-Secretary of State, and I wish it were possible for the Prime Minister to reconsider his decision. He told us at Question Time yesterday, I think, that there has never been any question of his going to Geneva. That is no doubt so, but I, for one, would wish that the question might now arise and that he might now go and exert the tremendous influence that he has in Europe, together with the influence of the United States Government.
As I have said, I believe that the success of the Conference, so far as we are concerned, lies in our attitude now, before the Conference, towards the proposals, whatever they may be, which the President of the United States has accepted. As the right hon. and learned Member for Hillhead (Sir R. Home) said —and I think the House agreed with him —these proposals, in so far as we know, are of a very substantial and real character, and if they are accepted by the American Government, they will go a very long way towards solving the difficulties in which we find ourselves to-day. I am convinced that the only way in which we can hope to get the American people—not the American Government, which has accepted them—to accept these proposals is by backing up their Presi-
dent and by doing everything we can now. We may have to make some small sacrifices, small, that is, by comparison with what we should gain, and the American people and Government would in return have to make very much larger sacrifices when the Conference is in session. If we could get a bargain of that kind—and I think we can, if the Government do all that they can to strengthen President Roosevelt's hands, it certainly would not be a bad bargain for the people of this country.

8.13 p.m.

Mr. VYVYAN ADAMS: I promise my hon. Friends on the benches immediately below me that I will not detain the Committee very long. If my hon. Friend the Member for South-West Hull (Mr. Law) will excuse me, I shall not follow him in the extraordinarily interesting speech which he has just delivered. I want to direct my attention, first of all, to a point which seems to have been omitted from the consideration of the hon. Member for North Bristol (Mr. Bernays) and the right hon. Member for Darwen (Sir H. Samuel) in the matter of the Tariff Truce. The whole idea of a Tariff Truce is no longer ludicrous since the advent of the Import Duties Act. Is it not true to say that without a tariff this country would be like a creature striding naked into the World Economic Conference the plaything of the worst blasts of the economic blizzard? It is the moderate measure of Protection adopted by this country which has relieved it from that rather pitiable condition. The Prime Minister, as I think every hon. Member expected, spent about 30 minutes in eloquently saying nothing. That was anticipated generally, both by the House of Commons and, I believe, by the country. Then my right hon. Friend the Leader of the Opposition proceeded to spend 70 minutes in the same rhetorical exercise. That result, as regards the Prime Minister's speech, was easy to anticipate. Indeed we could anticipate nothing else, but he said it so very eloquently that one felt that the same remark was justified of him as was made of Tennyson:
How little he says, yet how beautifully he says it.
At one moment I thought the plume was going to be blown away from the crest of Everest when the right hon. Gentleman
was definitely interrogated whether or not debts were going to be considered contemporaneously with tariffs. I must say that I find it entirely impossible to imagine that tariffs would be considered apart from debts. To my mind the two problems are interlocked; yet, although the right hon. Gentleman was definitely tackled upon the matter, as far as understanding what conclusions he wished us to infer from his reply, I at any rate am still, in his own language, "at sea." Greatly daring, I am going to say something which the Prime Minister certainly could not say here, and perhaps was not even able to say at the Presidential fireside. So valuable sometimes is the obscurity of the back benches. If cancellation by agreement between ourselves and America becomes impossible, we may definitely have to prepare to default. That is a very ugly word I know for an Englishman and it is particularly humiliating now when British credit has once again become the linch pin in the wheel of international finance; but, as every hon. Member is aware, the British Government's case was stated on 1st December last in a Note to the United States of America which, on all hands, has been regarded as unanswerable. At all events, if it is not unanswerable, it has not been answered, and even the "Manchester Guardian," which has never been remarkable for its ecstatic support of the National Government, described it as "a great State paper."
The American public so far seem entirely unable to grasp the irony of a situation where they are demanding payment in gold when they are no longer on the Gold Standard. I submit to the Committee that the world situation is too grave to allow prosperity to wait until American opinion has changed. We cannot wait for the Middle West to grasp the fact that the accumulation of the mere symbols of wealth is crushing America's capacity to produce that wealth. If necessary, by the apparently ugly expedient of default she may have to be dragged by the heels out of the midden of gold which is threatening to suffocate her. The whole difficulty of getting American opinion round to the unanswerable point of view is exactly epitomised in a legend about a speech said to have been delivered by an
American Senator to a. popular audience. He is credited with this extraordinary language:
We won't take their goods, we will make them. (Loud applause.) We won't take their gold, we have enough. (Renewed applause.) It is their money we want. (Tumultuous cheering).
The truth is, that payment of our debt to America, if we make another, will be nothing more or less on our part, since Lausanne, than a penal payment. For what, may I ask, are we paying this penalty? Is it for participation in the European War between 1914 and 1918? I would not go so far as to say that any Power which participates in any war is blameless. Clearly, no single Power can fight a war in complete isolation, but any Englishman who fairly reads the history of events immediately anterior to 1914 will come to the conclusion that this country is the least blameworthy for the catastrophe of 1914 to 1918. In spite of that, which, I believe, too, is regarded as unanswerable in every quarter of the House, this country is to be penalised most. The position is ridiculous if we, of all the Powers who fought in the War, are to be the most seriously penalised. I think opinion both inside and outside the House will have to face the possibility of the grim fact and necessity of repudiation—that is, of course, if we cannot achieve the ideal of cancellation by agreement.
I have one more submission to make to the Committee. I am very glad indeed that the question of disarmament was raised by the Prime Minister in his conversation with President Roosevelt. I should like to stress and underline what has been said by the hon. Member for Hull. Now that there is a prospect that debts may be finally removed from the international complex I am sorry to think that America's powerful criticism of the folly of the suicidal expenditure by the European powers and the force of that criticism, may be partly removed. I very much regret also that there is no immediate prospect of naval disarmament as between ourselves and America. The proposals of the British Disarmament Draft Convention, excellent as they are, as far as they go, are yet limited to air and land forces. When I think of disarmament I accept the view of the Government that it is by disarmament that we shall get security. And when I con-
template this great problem I cannot forget the relief which is owing to the taxpayer of this country and that the chief relief which we can get is by means of general disarmament and by a policy of international agreement on the battleship and her necessary foil, the submarine. In that way the taxpayer might be saved annually tens of millions of pounds. I would like to stress in my concluding words what hon. Members have said in all parts of the Committee. They have welcomed the visit of the Prime Minister to America. I am convinced for my own part that that visit has materially improved and enhanced the good relationships between ourselves and that great Republic. I believe that the League of Nations is an indispensable feature in international affairs but I believe also that there is a no less vital necessity for the English speaking peoples of the world, ourselves and the United States, to come together in a sure and permanent understanding. That understanding is most likely to be cemented by the personal contact of two gentlemen like the Prime Minister and President Roosevelt who, after all, speak approximately the same language.

8.23 p.m.

Mr. ENTWISTLE: I wish to join with those who have congratulated the Prime Minister on the results of his visit to the United States. I do not quarrel with the fact that in his statement on the results of their visit he has been unable to give us anything of a very concrete or detailed character. That was inevitable. It is thoroughly unreasonable to expect in connection with delicate discussions in which concrete facts must have arisen which will form the subject-matter of negotiations and bargaining at a subsequent conference, that the Prime Minister should be required now to state the concrete proposals advanced on both sides and the reception given to them. While recognising that it is unreasonable to expect the Prime Minister or any Member of the Government to state, prior to the World Economic Conference, their definite monetary policy and the detailed objectives which they have in mind, I urge strongly on the Government that even if they do not tell us what their policy is, it is most important they should at least have thoroughly made up their minds on these specific matters before the conference starts. I think that it
will be agreed that that is desirable, and I go further and say it is essential. It might sound very obvious to say that, but we do know that the Government have to make up their minds on some extraordinarily difficult problems. We know the strong anti-gold complex which has pervaded this House since the country went off the Gold Standard.
The theory of money is an extrordinarily difficult theory, and it is one about which a great many people have obtained some superficial knowledge in the last year or two. The more superficial it is the more dogmatic they are in the line that they have taken up on it. The strangest attitude has been taken up by those who say, "At no cost must we return to the Gold Standard. We are doing very well since we left gold in September, 1931, and, as the result of our depreciated exchange, we have had an advantage in our export trade in the world market. Leave well alone, and do not on any account go back to the Gold Standard which has let us clown in the past." That sounds all very well, and while the United States and France and other countries remain on the Gold Standard, and while they were willing for us to have these advantages of depreciation without entering into competition with them in depreciated exchanges, there was a great deal to be said for it. Moreover, there was this point, that while certain important trading countries were still on the Gold tSandard—which merely means that their currencies have a definite fixed relation to gold in that the price of gold was permanently fixed in terms of their own currencies—we could, through the machinery of the Exchange Equalisation Account and the skill and management of the Bank of England, maintain a comparative stability in our own exchange.
But that was only possible by the fact that there were important countries still on the Gold Standard, that there was a definite price of gold in relation to which we could manage our own currency, that there was some yardstick or measure in relation to which we could aim at some measure of stability. Those conditions, however, no longer prevail. It is true that France remains on the Gold Standard and the price of gold in sterling is now fixed merely by the exchange value of francs to sterling. It is unreasonable to think that France will be
able indefinitely to carry the whole burden of maintaining the Gold Standard and giving other countries the advantage of some form of stability of value without any of the disadvantages of being on the Gold Standard. I submit that the position is now rapidly arriving when there will be no measure of stability in international exchange at all. We are getting to an era in which we shall have violently fluctuating exchanges between every country in the world. If you ask any trading person, I. think that he will admit that if there is one thing that destroys trade far more than the old conditions when we were on the Gold Standard at too high a parity, it is not to know from day to day what the exchange rates will be in the country with whom you are endeavouring to trade. A violently fluctuating exchange makes trade quite impossible. Therefore, I submit that the positicn has very vitally altered, and if there is one thing of supreme importance to-day it is to try and arrive at a measure of stability between the exchange values of the different countries of the world.
If we are to get that stability, we must be prepared now at the World Economic Conference to go back to the Gold Standard. There must be an international monetary standard if we are to have stability of exchanges. That international monetary standard can be none other than gold. Theoretically, it might be some other standard. We have heard about an index of commodity standard, but I have never yet seen formulated by any economist any practical method of working such a standard. But whether it is practical or not, it is ruled out of practical politics by the fact that we would never get the agreement of the world as a whole on any monetary standard other than gold. Therefore, we must face the fact that we must be prepared in June at fie World Economic Conference to go back to gold. A definite question will arise as to what the ratio shall be. Of course, going back to gold, as everyone k:aows now, although there is still a little misconception about it in some quarters, does not mean going back to gold in the manner in which we did in 1925. It does not mean that an ounce of gold must necessarily be worth 85s. in English currency. We could come back to the Gold Standard and fix the
price of an ounce of gold at any amount we liked in sterling, and we would still be on the Gold Standard and enjoy all the advantages of stability.
It will be extremely difficult, of course, to arrive at the ratios at which the various countries could go back to the Gold Standard. Ultimately, the only proper ratios between the exchanges of one country and another must be determined by the respective price levels in those two countries, because, after all, that is all that exchange means. You have exchange purely for the purpose of converting a price in your own currency into the price in some other currency, and the true economic level of exchange between two countries must be determined by the respective price levels in those two countries.

The DEPUTY-CHAIRMAN (Captain Bourne): I am loth to interrupt the hon. and learned Member, but he must remember that the Vote before us at the present moment is the Foreign Office Vote. I agree that the question of exchange is a matter that will be raised at the World Economic Conference, and it is in order to raise it now, but I do not think that the Foreign Office can possibly be responsible for the details into which the hon. and learned Member is now going.

Mr. ENTWISTLE: I thought that the subject matter of the. Debate was the World Economic Conference and the policy of the Government at that conference. It is impossible to discuss that policy without going into these matters and the stabilisation of the Gold Standard, which we understand formed a large part of the discussions of the Prime Minister with President Roosevelt. If you consider that I am going beyond the confines of this Debate, I will reserve my speech until the Second Reading of the Exchange Equalisation Account Bill. I chose this particular occasion to make it because the Exchange Equalisation Account is rather restricted in its area, whereas I understood here that we were discussing the policy of the World Economic Conference.

The DEPUTY-CHAIRMAN: Perhaps I can assist the hon. and learned Member. On the Foreign Office Vote we are entitled to discuss the general policy of
the Government at the conference, but I think that the hon. and learned Member is now getting into such details that it will be necessary for a representative of the Treasury to reply to him. They are matters which cannot be raised on the Foreign Office Vote.

Sir JOHN HASLAM: May I say that I have been present throughout the whole of these discussions, and practically every speaker has dealt with the question of silver and gold and the relative value of the pound.

The DEPUTY-CHAIRMAN: The Debate has ranged very wide indeed, and so long as the hon. and gallant Member kept himself to the general question of the necessity of coming to a stable exchange I did not stop him, but now it seems to me that he has got on to a matter which is completely outside the purview of the Foreign Office. Whatever the merits of this question I think the details of it ought to be raised on the Treasury Vote, for, after all, the Treasury are responsible for that particular item. As long as he keeps to the question generally of whether a return to the Gold Standard would be sound, and that possibly we should not return to it at the old level, he would be in order, but when he goes into the detailed question as to what the level should be I think he is going beyond what can be raised on this particular Vote.

Mr. ENTWISTLE: I should have thought it would have been desirable that this matter should be discussed. Certainly these points were discussed on the Exchange Equalisation Account, but I thought they were more relevant to the World Economic Conference, which is the general matter under discussion this evening, because the Exchange Equalisation Account is only limited to the management of a fund for the purpose of preventing undue fluctuations in sterling, whereas here I am endeavouring to urge on the Government a permanent policy for stabilising our currency on a gold basis, and trying to show that that can be done, and that the only thing we need trouble about is to see that we get back on a sufficiently low basis. However, if you say, Captain Bourne, that I must not go into that in too great detail I will try to keep on the lines you have indicated.
I have endeavoured to point out the importance of coming back to gold. The Prime Minister has said, and President Roosevelt stated it in his broadcast to the American people the other day, that they have agreed on the desirability of raising the world level of wholesale prices. That does not carry us very far, because everyone has agreed on that for some time, but when the methods of achieving it have been advocated there has oven a great diversity of opinion and considerable opposition to the only methods which have been put forward as practical. There are two methods, I submit, by which the world wholesale price level could be raised. One is by adopting the recommendations of the Macmillan Report on monetary policy, and the other is by devaluation, such as we are told President Roosevelt is determined to apply. The objection to carrying out the recommendations of the Macmillan Report on monetary policy is that they will be slow in operation and will not be quite so certain in their action in bringing about this increased price level of wholesale commodities, and there will be statutory difficulties in various countries, because the ratio of their gold reserves to their currency is definitely fixed by law. Furthermore, the recommendation of the Macmillan Report involves international management and co-operation between the central banks, which will certainly be difficult of achievement, and at least take considerable time to bring about.
The second method of obtaining an increase in the world price level is by what is called the devaluation of the various currencies in terms of gold, that is, merely altering the price of gold in terms of the various national currencies. The advantage of that method of raising prices is that the result of it would be very rapid in action, it would work automatically, it would be quite certain in its action, and be perfectly simple and involve no artificial management. I suggest that we should welcome the determination, as now expressed by President Roosevelt, to devalue the American dollar, because while America remained on the Gold Standard at the old parity it was extremely difficult to get any general increase in the price level by the independent action of any individual Government. Now that America is prepared to devalue that will come to the same thing
in its effect on prices as if there were a large increase in the total quantity of gold in the world, because what the treasuries of the various countries are concerned about is the value of the gold in terms of their own currencies, and if the gold there is increased in value then the structure of credit based on those gold reserve's is expanded by the precise pro-potion of the devaluation of the currency in terms of gold. I submit, therefore, that we should be prepared at this stage to devalue our currency and come back to gold.
I was endeavouring, when you called me to order, Captain Bourne, to deal with the difficult question of what that ratio that amount of devaluation should be, but in view of your Ruling I shall not say anything more about it beyond this, that it is important that we should stabilise at a low enough ratio. We do not wart to incur the difficultie;, and disadvantages that we had when we came back to gold in 1925 at the old parity, but so long as we come back low enough—and, after al. we have the experience since September, 1931, to guide us—that is more important than the mere ate at which other countries come back. If we cannot get those other countries to agree to come back to gold otherwise than on a too high basis at least we shall be able to adjust matters afterwards by the fact that we are sow a tariff country, and have in our hand a weapon for negotiating trade agreements.
If the ratio at which we come back to gold is wrong, the tendency again will be for a drain of gold such as drove us off the Gold Standard in 1931. But when that happened we were defenceless. We had too great imports and a fall in our exports, and we were tnable to take any measures to correct them. We are no longer in that position. We are in the position of being able at any rate to modify our imports by tariffs, and to increase our exports by negotiation. In those circumstances, I submit that it is perfectly safe for this country to come back to gold on a devalued basis, provided we come back at a sufficiently low ratio, and I most strongly urge on the Government that they should not pay too much attention to the prejudice in some quarters against coming back to gold at any cost.
I have only one more word to say, and that is that while urging that we should
now be prepared to come back to the international Gold Standard I realise that it must be a condition of our coming back that we should have a settlement of the War Debts question with America. It is essential before we Dome back to the Gold Standard that that question should be settled. I suggest that it would be very undesirable if, in our anxiety to get agreement on other important points this matter were shelved or postponed until after the World Economic Conference. We should say clearly to America: "We are prepared to settle this debt question on reasonable terms," as the right hon. Gentleman the Member for Hillhead (Sir R. Home) said this evening. We shall have to pay something. It is clear that America will not cancel her Debt at a figure less than the £150,000,000, which has been imposed finally on Germany at Lausanne. We must prepare to settle on some reasonable terms, but the discussion must be round about the figure that was agreed for Germany at Lausanne; it cannot be at a much higher scale.
The time has come—and I agree with remarks made by the hon. Gentleman who preceded me—if the democracy of America is not prepared to allow its representatives to discuss the debt question on any terms on which there is likely to be agreement, when the Government ought to be in a position clearly to state to the American Government that, if a settlement is not arrived at, no further payment will be made by this country. The last Note which was sent by this Government bore that implication, not perhaps perfectly clearly, but it could not have had any other implication than that the payment to be made in November was merely to be regarded as a payment on account of capital and to be included in the final settlement which was to be arranged. The arguments of the Note make it perfectly clear that we never contemplated any payments on a large scale because we showed, on economic grounds, how that was quite impossible and would be most damaging to the world at large.
On these various points the Government should firmly make up their minds before the World Economic Conference, determined that, on the debt question, if
America will not make a reasonable settlement, to be prepared to say: "We do not propose to make any further payment to America." With regard to this most important question of monetary policy, we should be prepared to say that we are determined to go back to the Gold Standard if the United States will agree to do the same, and to restore an international Gold Standard on a devalued basis.

8.48 p.m.

Mr. MAXTON: I wish to put a viewpoint representative of myself and my friends in this part of the House. I do not think that I shall have to be called to order for going too far into the question of the Gold Standard or bimetallism, because I do not feel that these things are the fundamental issues involved in the problem that confronts the Committee, or in the problem that will confront the World Economic Conference when it, meets in June. I was disappointed with the Prime Minister's statement to-day, and my disappointment was not reduced in any way when I heard the subsequent speech of the Secretary of State for Foreign Affairs. It is probably true that, in a world that is seething with national rivalries and suspicions, when the representative men of various countries get together for a personal contact as distinct from communications by letter or by telephone, certain suspicions may be removed. Personal contacts of that kind are very valuable, but I do not think that the Prime Minister told us anything to-day that would justify any ordinary man of common sense in believing that anything of importance took place at Washington beyond, as I have just said, the value of personal contact. I know that it is very difficult for any Minister, when he is tackled about negotiations halfway through, to say the definite things that the nation wants to hear. I know the Prime Minister very well and always, in my association with him, he knew the advantage of an indefinite situation of that sort, and he made the fullest use of it. [An HON. MEMBER "Statesmanship."] It may be statesmanship of the classical man to speak with a double tongue. I would, if I could, tell the Committee, because there are great things which I could tell them if my lips were not sealed, and if
I had not to bear in mind things that the rest of hon. Members would have no real understanding about.
That may be statesmanship of the golden era, but it is not the sort of common-sense talk that we want to-day. We ought to know in this country and in this House, what Britain had to say to America through her Prime Minister, and we ought to know more definitely still what Great Britain has to contribute to the World Economic Conference when it comes. All that we have had to-day is the three or four issues which have, time and again, been the basis of interesting academic discussions, just as they have been the subject of discussions in economic text-books for the last lb years—bimetallism; the Gold Standard; how to maintain international parities in exchange; War Debts, and how they are to be paid in goods or money. I am afraid that the World Economic Conference will also have its pundits who hold by one or other of those theories, and that that conference will be wasted in and economic discussions when there are hundreds of millions of people not wanting discussions, but wanting bread.
I was interested to hear the Foreign Secretary being horribly surprised and shocked at the mere idea that there should be anybody, particularly the Leader of the Opposition, who questions the desirability of raising wholesale prices. For the first four or five years that I was in this House, every governmental effort in this matter was directed towards the end of getting prices down. Again and again, from the Treasury Bench, we were told that it was only when we got prices down to rock bottom that there would be a great revival in world trade. Now the Foreign Secretary of to-day is shocked that there should be anybody so foolish as to believe that that is the way to solve the problem of the world which is, mark you, to get the people of the world bread—that is the essential problem, to get bread in the homes of the people of the world. We can fool around with treaties and gold prices and all the rest of it, but that is the problem of trade and commerce, getting people bread. That was the problem of our woad-painted, skin-covered ancestors, but they did it; and the most primitive tribes in Africa can do it. Now we have a great structure of
banks, exchanges, stock exchanges, Cabinet Ministers and civil servants, so complete that we lose sight of what our purpose is. The purpose of the whole business, political, financial, commercial and industrial, is to get bread to the people. Yet the Foreign Secretary seems shocked at any suggestion that the raising of the price of bread is not necessarily a way by which the people will be able to get bread mere easily.
I want to put this to the Lord President of the Council, who is the only Member of the Government new left on the bench. The captains and the kings have departed to their various duties, and Horatius keeps the bridge alone, or, at any rate, with only one to help, a Liberal colleague who is occupying the place of Spurius Latins. I thought there was something spurious about one of the two. [HON. MEMBERS: "Oh!"] No; that is not a subtle gibe at the Liberal associations of the junior Lord of the Treasury who accompanies the Lord President on the bench at the moment. I ask the right hon. Gentleman to try to persuade his Cabinet that what Britain has to take to the World Economic Conference is not a series of devices by which all the nations will agree to throw away the things that give them a competitive advantage over other nations. That is the World Economic Conference as I see it now—that, in a competitive world, the 60 competing nations are expected to come into the London World Economic Conference and all agree to give away the things that give them some competitive advantage just now over their fellows. I can imagine that being done. I can imagine all the nations agreeing to give up the things that give them competitive advantages over their fellows. If I proposed it, I am sure I should be told that it was Utopian, but, when it comes from practical politicians, I am bound to accept it as a practical policy. I can imagine, by putting a terrible strain on my imagination, that all the competing nations of the world will agree at the World Economic Conference to give up all the things that give them competitive advantages, but I am perfectly certain that, having agreed to give up the competitive advantages which at present they have, they would immediately depart from London to their own separate places and apply their brains to discovering new competitive
methods of getting the better of one another.
I suggest to the Lord President of the Council that he should persuade his Cabinet colleagues not to be foolish, for once in their lives to stop being mere idealists and Utopians. Surely, that is a perfectly sound tu quoque. Any person who sets out to do a thing that is frankly impossible is a Utopian, and I ask them not to attempt the Utopian task of getting the nations of the world to give up competition while maintaining a competitive basis for the whole of the industrial labour of the world. I ask them to go to the Conference, not attempting to face the problem of how to maintain competition while abolishing it, but to go there to discuss how the resources and the capacities of the various nations of the world can be most economically directed and organised towards satisfying the material needs of the people of the world. That would be a World Economic Conference. This is merely going to be a conference of the nations of the world, each going as a nation, thinking in terms of the advantages it can get for itself as a nation. In the Conference is to be a World Economic Conference, the nations have to go there trying to think of the world and the people of the world as one unit.
I do not know whether that frame of mind is yet present in the world. I hear one hon. Member say it is Utopian. It may be. I know that when any Member from Scotland in this House comes and talks about Scotland as a separate nation, with national aspirations, with a national trade and industry of its own, all the English Members think that it is a very trivial, parochial, parish-pump idea that Scotland should think of itself as a separate nation, instead of regarding itself as a bit of the great British nation. I am capable of seeing a nationalistic view as being limited in that way. I hope that the Government will be just as capable of thinking in terms of the world, when they go to the World Economic Conference, as I am of thinking of Great Britain, although all my national aspirations and prejudices make me more concerned with the welfare of Scotland and the West of Scotland than with London and the South of England.
I am sorry now that the House of Commons did not take earlier opportunities of discussing the Agenda for the World Economic Conference. I think we made a profound mistake, and insulted ourselves as a House of Commons, when we agreed to the attitude that the preparation of the Agenda was a matter for the experts. I think that the House of Commons was much more capable of deciding what were the issues that should be discussed and should mine on to the Agenda. It was probably true that, when those issues were laid down on the Agenda, there was a place for the experts, but the preparation of the Agenda itself was a job for the House of Commons. I hope it is not too late, because the idea of a World Economic Conference is a big idea. Anyone who has had international ideas and aspirations must appreciate the bigness of the conception, and it would be very pathetic if a big conference of that description, which has attracted the thoughts of men in all corners of the world, should be wasted on trivial discussions about 10 Der cent, tariffs, gold or silver, or the raising of wholesale prices, instead of considering the great, big, over-riding question whether it is possible for the nations of the world to agree to pool their capacities, to pool their resources, and to divide equitably and fairly among all the people the products which those resources and capacities can in these days produce.

9.5 p.m.

Mr. DAVID GRENFELL: We are now discussing an Amendment to reduce the Foreign Office Vote by £100. We moved it because we hoped that a. discussion would have some influence upon the Conference. It cannot meet without influencing very seriously indeed the prospects of supplying those fundamental human needs which concern us all. We have failed to ascertain again to-day what is to be attempted at this Conference. We thought, having waited until the Prime Minister came back, now that the conversations at Washington were over, now that the right hon. Gentleman knew the mind of the American President and now that other gentlemen have been to America too, there might be an opportunity for frank and full consultation with Members of the House of Commons
and the people of the country. The Prime Minister told us on Thursday only just a little less than he told us to-day. I confess to a sense of personal disappointment that we could not obtain more information after four days' conversation between the Prime Minister and the President of the American Republic. There were conversations touching on these vital questions which are of great moment to the whole world.
Singularly enough, these discussions in America have been carried on more or less in secrecy in every case. M. Herriot has come back to Paris and the same thing happened there. He came back with his wallet full of information and conveyed that to his colleagues, but he is to say nothing for the moment to the French public in regard to the details of these conversations. I gather that an Italian delegate has been to America and has made his report, but, under the present constitution, very little need be done to satisfy the needs of the people. An Argentinian delegate is in America now. These people go one by one and have separate conversations, but secrecy is maintained and no one knows what they discuss. No one knows whether they discuss the same thing—whether President Roosevelt had the same kind of conversations with the representatives of the several countries who visited him. We have an idea from President Roosevelt's own speech of 3,000 words which he broadcasted to the whole world a night or two ago. It was a very interesting speech, showing a, capacity to interpret and to explain the American economic situation in a clearer way than any European statesman has attempted to portray the conditions in his own country. President Roosevelt urges attention to the enormous debts which have been piled upon the American people by financial manipulations which must be condemned and must be held responsible in the main for the present economic difficulties of the whole world.
He said the main object of the Government; must be to raise commodity prices so that borrowers may repay their loans at their value when borrowed, and he says, "If we can do that we shall have solved our main difficulty." Indeed, he went a long way towards presenting a solution for America, where the enormous depression in the prices of primary
products has had a much greater effect probably than here. We have very few primary products in this country. They do not enter in the same scale into our commercial life. There is no primary product except coal that we send abroad in very large volumes or values. In America they grow wheat, cotton and timber, and all those commodities, which are subject to world competition and the universal depression which has overtaken the world, have fallen very considerably in value. The wheat farmer of the Middle West finds that he has to hand over 14 times as much wheat to pay the annual burden on the debt as he did when the debt was contracted. Wheat is only one-fourteenth of the value in money that it represented eight or 10 years ago before the period of inflation and before the fall in prices took place. When one recognises the special problems of America, one has to try to compare the means by which America's problems can be solved and see whether we have anything to gain by following the special methods that may be applied in that country. We find that America has already taken action. Action has been urged upon this House, as if action on our part was a desirable thing, but action without proper understanding might be a most dangerous thing, and we are not quite certain even yet that the rapid action taken in America is going to solve their problem as effectively as some people imagine.
In view of the disparity in the nature of the problems of these two countries we should like to know whether any agreement was possible with America. We are awaiting a Conference where 61 nations are to be represented. I should like to know in a general way whether the four or five nations already represented in conversations in America have found it possible to agree on a smaller scale than the world-wi.de scale of the Conference which is to be held. We should like to know the measure of agreement, and whether the Government are prepared to take action similar to the action which has been taken in America in what is called the Farm Relief Bill. Here is an example of legislation of a very drastic character. Let us consider the means taken in America and whether we are prepared to take similar action in the solution of our own domestic problems in preparation for dealing with
the solution of the larger world problems in which we are to share.
The American Farm Bill consists of three parts, and hon. Members will find that it will well repay their interest if they fully examine the Bill. The first part of the Bill seeks to impose a tax on all agricultural products to the extent of the difference between the present prices and the average prices during the five years from 1909 to 1913. Prices are to be raised to the consumer. A tax is to be put upon the present level of prices which is to be devoted to a fund, the proceeds of which are to be apportioned among farmers in the form of compensation for allowing their land to become unproductive and idle. It is a bonus on idleness. They are now to get payment for not working and not producing. Part 3 of the Bill deals with the policy of inflation. The American bankers are to take up 3,000,000,000 dollars with the object of improving the credit of the banks operating throughout all the States in America. Further, it is intended in Part 3, as a, terminating stroke in deflation, that power be given to the President to return to the Gold Standard, not at the rate at which the dollar previously stood of 23.25 grains to the dollar, but with a gold content of half that level, namely of 11⅝ths grains to the dollar.
We do not know whether there is any sanctity in the fixing of gold parity, but steps are being taken in America to write down the dollar to half its value. Are hon. Members prepared to write down the value of the pound sterling to that extent? Is that in contemplation? Would the House vote in favour of a thing of that kind? Would it be a good thing for this country? We ought to know whether the Government are prepared to take similar measures to America in working with that country in regard to the new co-operation in which the whole world is to share. I think that for the moment the question of returning to the Gold Standard is barred out. We are to substitute some other measure. Here comes the question of inflation. There are people who believe in inflation without, I fear, realising all its implications. My right hon. Friend was charged with having interpreted this thing wrongly. People who use the word "default" with horror, use the word "deflation," not
realising that it often means default in many cases
There is the policy of inflation. The Foreign Secretary directed attention to the Leader of the Opposition this afternoon, and I wish, with due modesty, to give a reply to the allegation brought against my right hon. Friend. The Foreign Secretary said that the Leader of the Opposition had questioned the policy of raising prices, and that it appeared to be inconsistent with what the right hon. Gentleman believed to be the policy of this party. He charged the right hon. Gentleman and those who sit with him with being hostile to this plan to save the world, and he quoted the words of the right hon. Gentleman, that the people who will pay most are the masses of workpeople. The right hon. Gentleman said that, and I say it, and I am satisfied that we can sustain the contention wherever the argument is allowed or whoever takes part in the argument whether inside this House or elsewhere. The right hon. Gentleman quoted a statement which really confirmed the opinion of my right hon. Friend. The Foreign Secretary quoted from a report of the League of Nations in which it stated that the fall in commodity prices was responsible for unemployment, and that among other effects it increased the burden of fixed charges. I do not know whether the right hon. Gentleman scored a point on his own premises, but I am sure that he did not score in regard to the quotation which he made from the League of Nations.
I should like to know whether the burden of fixed charges has now brought down world prices. The allegation is made that the burden of fixed charges has entirely destroyed prices throughout the world. We have to be careful, when we demand a solution or readjustment of these things, of any action taken in this House. The Lord President of the Council, who is very reticent in these Debates, is not given to rash judgment, and considers well before he makes up his mind. I would like to know from him what is meant by the Government in the steps they are to take to raise prices. How are they going to increase purchasing power? It is no use raising prices unless you raise purchasing power to a corresponding extent. What steps are the Government taking to raise prices and what is to be done to increase pur-
chasing power even if only corresponding to the increase in prices? To raise prices without raising wages would certainly reduce the volume of trade, and I fail to see how that could benefit anybody.
This policy of a reduction of output is being pursued all along the line. Not merely is there a deliberate attempt to reduce the output of agriculture, but there are indications that the Government are committing themselves to this sort of thing. You find it in legislation, in Orders-in-Council and in the agreements with foreign countries. There is not only a restriction of the volume of trade in commodities imported into this country, but through various pieces of legislation there is to be a reduction in the output of commodities at home. I would like to know whether it is intended to raise prices by restricting the volume of production. There are two ways of dealing with this matter: First of all, to restore the wages which have been taken away from the working people in the last 12 years. £2,000,000 per working day has been lost, £12,000,000 per week and £600,000,000 a year has been taken off the wages bill of this country in that period. Put that back, and it will at once cause such a demand for cornmodies that by the end of one pay week you will find prices soaring, more people buying and more money coming into circulation. If that can be done, it should be done by international agreement with all nations carrying on the same policy for raising prices simultaneously.
Another way of meeting this difficulty is to reduce the fixed charges. Is there any reason why the dollar or the pound lent to the State or to industry at a time when it represented half its present value should be considered at its full value? Is there any reason why we in this country should not reduce to their real value the nominal debts, in the form of national debts, municipal debts and all other fixed charges on industry in order that we may carry a reasonable burden on industry? The world is really over-burdened with debt, and we are very disappointed to find this question of debt reduction is not to be talked about at the Conference. The Prime Minister told us to-day that concurrently and parallel with, and with other technical qualifications, there is a probability of another conference on this issue being held in London. Why not
recognise straight away, as President Roosevelt has in America, that this question is a paramount issue and must be discussed at a world. conference? It is no longer a question oetween France and the United States and ourselves and United States or of the Balfour Note or any other note. It is a question of 60 nations coming togetier to decide how best they may make their future arrangements in order that the people may have a chance of a decent living. It is no use boggling at these things and standing on ceremony and saying that to discuss it would displease America and therefore it cannot be done. We are in the position of people who have paid and were prepared to pay until a settlement was assured. The Government should let us have an opportunity of saying these things.
The most definite thing the Prime Minister said was that a tariff truce is to be arranged. The right hon. Gentleman gave me the impression that no further initiative could be taken or legislation passed in this House to raise additional import duties. Tariffs were to go on as they are now until the truce is called off whenever that may be. The Foreign Secretary quoted a report of the League of Nations. I have here the official report of the World Economic Conference, 1927, in which it is stated that tariffs, though within the sovereign jurisdiction of the separate States, are not matters of purely domestic interest but greatly influence the trade of the world. It goes on to say that the time has come to put an end the increase of tariffs and move in the opposite direction. The late Mr. William Graham was a close student of the League of Nations and a very good economist too. He did all he could to get the world to move in the opposite direction, but because he failed in 1929–30 that is no reason why the problem should not again be tackled. He had not a majority in this House, and Continental observers knew that though he tried to persuade them that it might he to their advantage not to have high tariff walls dividing them from each other, there might be a Tory Government again coming into power in this country which would impose tariffs, despite Mr. William Graham and all his good intentions. He was not working in the best possible conditions, and it was no discredit to him that he failed. The circumstances must be taken into account,
and it is not too late now. This statement, which came from the League of Nations in 1927, is equally true to-day.
I ask the Lord President of the Council and the Government: what are we doing now in regard to tariffs? We have put tariffs on in regard to the whole world. We are raising world prices by a combination of tariffs and quotas. I had a reply from the President of the Board of Trade yesterday that bacon products had gone up by 30 per cent. in three months. Indeed, the intention is to use tariffs and regulations to raise tlhe prices not only of our home products but of the products that come from foreign cuntries. I do not see how we are going into these tariff discussions unless the Government are prepared to get an understanding with the rest of the world which will enable the world to regain prosperity, and unless they are prepared to abate their zeal and confidence in tariffs and become Free Traders. If the majority of 61 nations come to the conclusion reached by the League of Nations as far back as 1927, are we so closely wedded to tariffs and protection that we shall find it impossible to take our place in this conference freely and fully? That is the problem.
I do not believe that a capitalist system can right itself. I believe that it is breaking down all over the world. America is the ideal home of capitalism, but it is there that the failure is greater than anywhere else. If those who believe in capitalism wish to continue it, they must convince this House and the world that they can, either by international conferences or by nations acting either collectively or individually, do something to maintain that system intact and enable people to live. I do not believe it can be done, and I do not think that the problem of capitalism can be resolved even at this conference. What is the view of hon. Members as to the maximum weight that the capitalist system can carry? What is the burden of international debt, industrial capital, ground rents and vested interests that can be carried? When is the time coming when we must jettison part of the burden? When are we to lighten the burden on the industrial system? Let it be soon. Let us say so. There is
no disgrace in our facing up to this problem. We shall be very much disappointed if we see the problem and turn our backs upon it through cowardice. The downfall of the capitalist system will be the cause of confusion and great disorder in the world, and whatever system takes its place will take its place much more easily and beneficially by the process of gradual transformation rather than allowing the system to be broken down by the weight of its own anomalies.
I should like to believe that the conference is not going to consist of 61 delegates, each going there with a different opinion, each having a different interest, each prejudiced with its own point of view. I would like to believe that the agenda when it is drawn up, if it is not already drawn up, will be the agenda of a conference working to plans and specifications, working on some agreed lines, working with an agreed object. I would like to believe that the objects indicated by the hon. Member for Bridgeton (Mr. Maxton) will be among the objects of the conference. We ought to come to a conclusion as to whether there is not the prospect of futility in too much attention being paid to propping and shoring up bad material, as the President of the Council once described it. Are we going to prop up this thing, or are we prepared in the World Economic Conference to take bolder lines? We, on these benches, believe that the world can be set right. We believe we can restore the purchasing power of the masses of the people. We believe that it is vitally necessary that the purchasing power shall be restored at the earliest possible moment. If you work to a plan, if the plan is clear in your own mind, if you have the materials for the job, like good craftsmen you will be laying the foundations on which a new structure of civilisation can be erected, in which man will find it convenient and comfortable to live, but without plan, without foresight and without forethought the conference is bound to fail.

Question put, "That a sum, not exceeding £124,178, be granted to His Majesty for the said Service."

The Committee divided: Ayes, 39; Noes, 241.

Division No. 160.]
AYES.
[3.22 p.m.


Acland Troyte, Lieut.-Colonel
Christie. James Archibald
Fade, Sir Bertram G.


Adams, Samuel Vyvyan T. (Leeds, W.)
Clarke, Frank
Fleming, Edward Lasceiles


Agnew, Lieut.-Com. P. G.
Clarry, Reginald George
Foot, Isaac (Cornwall, Bodmin)


Aitchison, Rt. Hon. Craigle M.
Clayton, Dr. George C.
Fox, Sir Gifford


Albery, Irving James
Cochrane, Commander Hon. A. D.
Fremantle, Sir Francis


Allen, Sir J. Sandeman (Liverp'l, W.)
Colfox, Major William Philip
Fuller, Captain A. G.


Allen, Lt.-Col. J. Sandeman (B'k'nh'd)
Collins, Rt. Hon. Sir Godfrey
Ganzoni, Sir John


Allen, William (Stoke-on-Trent)
Colman, N. C. D.
Gibson, Charles Granville


Anstruther-Gray, w. J.
Colville, Lieut.-Colonel J.
Gilmour, Lt.-Col. Rt. Hon. Sir John


Applin, Lieut.-Col. Reginald V. K.
Conant, R. J. E,
Glossop, C. W. H.


Apsley, Lord
Cook, Thomas A.
Gluckstein, Louis Halle


Baldwin, Rt. Hon. Stanley
Cooke, Douglas
Golf, Sir Park


Barclay-Harvey, C. M.
Cooper, A. Duff
Goodman, Colonel Albert W.


Beauchamp, Sir Brograve Campbell
Copeland, Ida
Graham, Sir P. Fergus (C'mb'rl'd, N.)


Benn, Sir Arthur Shirley
Craddock, Sir Reginald Henry
Granville, Edgar


Bernays, Robert
Croft, Brigadier-General Sir H.
Grattan-Doyle, Sir Nicholas


Bllndell, James
Crooke, J. Smedley
Griffith, F. Kingsley (Middlesbro', W.)


Boulton, W. W.
Crookshank, Capt. H. C. (Galnsb'ro)
Grimston, R. V.


Bowyer, Capt. Sir George E. W.
Cross, R. H.
Gritten, W. G. Howard


Boyce, H. Leslie
Crossley, A. C
Guest, Capt. Rt. Hon. F. E.


Bracken, Brendan
Culverwell, Cyril Tom
Guinness, Thomas L. E. B.


Broadbent, Colonel John
Curry, A. C.
Gunston, Captain D. W.


Brocklebank, C. E. R.
Davies, Maj. Geo. F.(Somerset, Yeovil)
Guy, J. C. Morrison


Brown, Col. D. C. (N'th'ld., Hexham)
Davison, sir William Henry
Hacking, Rt. Hon. Douglas H.


Brown, Ernest (Leith)
Despencer-Robertson, Major J. A. F.
Hales, Harold K.


Browne, Captain A. C.
Dickie, John P.
Hamilton, Sir George (llford)


Buchan-Hepburn, P. G. T.
Donner, P. w.
Hamilton, Sir M. W.(Orkney & Zetl'nd)


Burgin, Dr. Edward Leslie
Doran, Edward
Han bury, Cecil


Burnett, John George
Dower, Captain A. V. G.
Hannon, Patrick Joseph Henry


Cadogan, Hon. Edward
Drewe, Cedric
Harris, Sir Percy


Campbell, Edward Taswell (Bromley)
Dugdale, Captain Thomas Lionel
Hartland, George A.


Campbell, Vice-Admiral G. (Burnley)
Duncan, James A. L. (Kensington, N.)
Harvey, Major S. E. (Devon, Totnes)


Campbell-Johnston, Malcolm
Eady, George H.
Haslam, Sir John (Bolton)


Caporn, Arthur Cecil
Elliot, Major Rt. Hon. Walter E
Headlam, Lieut.-Col. Cuthbert M.


Castlereagh, Viscount
Ellis, Sir R. Geoffrey
Hellgers, Captain F. F. A.


Cautley, Sir Henry B.
Elliston, Captain George Sampson
Henderson, Sir Vivian L. (Chelmsford)


Cayzer, Maj. Sir H. R. (Prtsmth., S.)
Elmley, Viscount
Heneage, Lieut.-Colonel Arthur P.


Cazalet, Thelma (Islington. E.)
Emmott, Charles E. G. C.
Hills, Major Rt. Hon. John Waller


Chamberlain, Rt. Hon. Sir J. A. (Birm., W)
Emrys-Evans, P. V.
Holdsworth, Herbert


Chamberlain, Rt. Hon. N.(Edgbaston)
Erskine, Lord (Weston-super-Mare)
Hope, Capt. Hon. A. O. J. (Aston)


Chapman, Col. R.(Houghton-le-Spring)
Erskine-Bolst, Capt. C. C. (Blackpool)
Hore-Bellsha, Leslie


Chapman, Sir Samuel (Edinburgh. S.)
Evans, Capt. Arthur (Cardiff, S.)
Hornby, Frank


Chorlton, Alan Ernest Leofric
Evans, R. T. (Carmarthen)
Home, Rt. Hon. Sir Robert S.


Horsbrugh, Florence
Mitchell, Sir W. Lane (Streatham)
Savery, Samuel Servington


Howitt, Dr. Alfred B.
Molson, A. Hugh Elsdale
Scone, Lord


Hudson, Capt. A. U. M. (Hackney, N.)
Monsell, Rt. Hon. Sir B. Eyres
Shakespeare, Geoffrey H.


Hudson, Robert Spear (Southport)
Moore, Lt.-Col. Thomas C. R. (Ayr)
Shaw, Helen B. (Lanark, Bothwell)


Hume, Sir George Hopwood
Morris, John Patrick (Salford, N.)
Shepperson, Sir Ernest W.


Hunter, Dr. Joseph (Dumfries)
Morris, Owen Temple (Cardiff, E.)
Simon, Rt. Hon. Sir John


Hurd, Sir Percy
Morris-Jones, Dr. J. H. (Denbigh)
Skelton, Archibald Noel


Hurst, Sir Gerald B.
Muirhead, Major A. J.
Slater, John


Jackson, Sir Henry (Wandsworth, C.)
Munro, Patrick
Smiles, Lieut.-Col. Sir Walter D.


James, Wing.-Com. A. W. H.
Nation, Brigadier-General J. J. H.
Smith, Louis W. (Sheffield, Hallam)


Jamieson, Douglas
Nicholson, Godfrey (Morpeth)
Smith, R. W. (Ab'rd'n & Kinc'dine, C.)


Jesson, Major Thomas E.
Nicholson, Rt. Hn. W. G. (Peterst'ld)
Smithers, Waldron


Johnstone, Harcourt (S. Shields)
Nunn, William
Somervell, Donald Bradley


Jones, Henry Haydn (Merioneth)
O'Connor, Terence James
Somerville, Annesley A. (Windsor)


Jones, Lewis (Swansea, West)
Ormsby-Gore, Rt. Hon. William G. A.
Sotheron-Estcourt, Captain T. E.


Kerr, Hamilton W.
Palmer, Francis Noel
Southby, Commander Archibald R. J.


Kimball, Lawrence
Peake, Captain Osbert
Spencer, Captain Richard A.


Knight, Holford
Peat, Charles U.
Spender-Clay, Rt. Hon. Herbert H.


Lamb, Sir Joseph Quinton
Perkins, Walter R. D.
Stanley, Hon. O. F. C. (Westmorland)


Lambert, Rt. Hon. George
Peto, Sir Basil E. (Devon, B'nstaple)
steel-Maitland, Rt. Hon. Sir Arthur


Latham, Sir Herbert Paul
Peto, Geoffrey K.(W'verh'pt'n, Bilston)
Stevenson, James


Law, Richard K. (Hull, S. W.)
Pickering, Ernest H.
Stewart, J. H. (Fife, E.)


Leckie, J. A.
Pickford, Hon. Mary Ada
Stewart, William J. (Belfast, S.)


Leech, Dr. J. W.
Pike, Cecil F.
Storey, Samuel


Lees-Jones, John
Potter, John
Strauss, Edward A.


Levy, Thomas
Pownall. Sir Assheton
Strickland, Captain W. F.


Liddall, Walter S.
Procter, Major Henry Adam
Sueter, Rear-Admiral Murray F.


Lindsay, Noel Ker
Raikes, Henry V. A. M.
Thomas, James P. L. (Hereford)


Lister, Rt. Hon. Sir Philip Cunliffe-
Ramsay, Alexander (W. Bromwich)
Thompson, Luke


Locker-Lampson, Rt. Hn. G.(Wd. Gr'n)
Ramsay, Capt. A. H. M. (Midlothian)
Titchfield, Major the Marquess of


Lockwood, John C. (Hackney, C.)
Ramsden, Sir Eugene
Touche, Gordon Cosmo


Lumley, Captain Lawrence R.
Rankin, Robert
Train, John


Lyons, Abraham Montagu
Rathbone, Eleanor
Tryon, Rt. Hon. George Clement


Mabane, William
Rea, Walter Russell
Ward, Lt.-Col. Sir A. L. (Hull)


Mac Andrew, Capt. J. O. (Ayr)
Reid, Capt. A. Cunningham-
Ward, Irene Mary Bewick (Wallsend)


McCorquodale, M. S.
Reid, William Allan (Derby)
Warrender, Sir Victor A. G.


MacDonald, Rt. Hon. J. R. (Seaham)
Renwick, Major Gustav A.
Watt, Captain George Steven H.


Macdonald, Capt. P. D. (1. of W.)
Roberts, Aled (Wrexham)
Wedderburn, Henry James Scrymgeour-


McEwen, Captain J. H. F.
Roberts, Sir Samuel (Ecclesall)
Wells, Sydney Richard


McKie, John Hamilton
Robinson, John Roland
White, Henry Graham


Maclay, Hon. Joseph Paton
Ropner, Colonel L,
Whyte, Jardine Bell


McLean, Major Sir Alan
Rosbotham, Sir Samuel
Williams. Herbert G. (Croydon, S.)


Macmillan, Maurice Harold
Ross Taylor, Walter (Woodbridge)
Wilson, Clyde T. (West Toxteth)


Macpherson, Rt. Hon. Sir Ian
Rothschild, James A. de
Wilson, G. H. A. (Cambridge U.)


Magnay, Thomas
Runciman, Rt. Hon. Walter
Wolmer, Rt. Hon. Viscount


Maitland. Adam
Rutherford, John (Edmonton)
Wood, Rt. Hon. Sir H. Kingsley


Mander, Geoffrey le M.
Rutherford, Sir John Hugo (Liverp'l)
Wood, Sir Murdoch McKenzie (Banff)


Margesson, Capt. Rt. Hon. H. D. R.
Salmon, Sir Isidore
Worthington, Dr. John V.


Martin, Thomas B.
Salt, Edward W.



Mason, David M. (Edinburgh, E.)
Samuel, Sir Arthur Michael (F'nham)
TELLERS FOR THE AYES.—


Mayhew, Lieut-Colonel John
Samuel, Rt. Hon. Sir H. (Darwen)
Sir Frederick Thomson and Mr.


Mills, Sir Frederick (Leyton, E.)
Sandeman, Sir A. N. Stewart
Womersley.


Mills, Major J. D. (New Forest)
Sassoon, Rt. Hon. Sir Philip A. G. D.



NOES.


Attlee, Clement Richard
Hall, George H. (Merthyr Tydvil)
Owen, Major Goronwy


Banfield, John William
Hirst, George Henry
Parkinson. John Allen


Batey, Joseph
Jones, J. J. (West Ham, Sitvertown)
Price, Gabriel


Bevan, Aneurin (Ebbw Vale)
Jones, Morgan (Caerphilly)
Thorne, William James


Cocks, Frederick Seymour
Kirkwood, David
Tinker, John Joseph


Cripps, Sir Stafford
Lansbury, Rt. Hon. George
Wedgwood, Rt. Hon. Joslah


Daggar, George
Lawson, John James
Williams, David (Swansea, East)


Davies, David L. (Pontypridd)
Leonard, William
Williams, Edward John (Ogmore)


Davies, Rhys John (Westhoughton)
Logan, David Gilbert
Williams. Or. John H. (Llanelly)


Dobble, William
Lunn, William
Williams, Thomas (York., Don Valley)


Edwards, Charles
Macdonald, Gordon (Ince)



George, Major G. Lloyd (Pembroke)
McEntee, Valentine L.
TELLERS FOR THE NOES.—


Greenwood, Rt. Hon. Arthur
Mainwaring, William Henry
Mr. John and Mr. Groves.


Grenfell, David Rees (Glamorgan)
Maxton, James



Resolution agreed to.

Division No. 161.]
AYES.
[9.39 p.m.


Attlee, Clement Richard
Groves, Thomas E.
Mason, David M. (Edinburgh, E.)


Banfield, John William
Hall, George H. (Merthyr Tydvll)
Maxton, James


Batey, Joseph
Hirst, George Henry
Milner, Major James


Bevan, Aneurln (Ebbw Vale)
Jenkins, Sir William
Parkinson, John Allen


Cape, Thomas
John, William
Price. Gabriel


Cocks, Frederick Seymour
Jones, Morgan (Caerphilly)
Thorne, William James


Crlpps, Sir Stafford
Lansbury, Rt. Hon. George
Tinker, John Joseph


Daggar, George
Lawson, John James
Williams, David (Swansea, East)


Davles, David L. (Pontypridd)
Leonard, William
Williams, Edward John (Ogmore)


Davles, Rhys John (Westhoughton)
Logan, David Gilbert
Williams, Dr. John H. (Llanelly)


Dobble, William
Lunn, William
Williams, Thomas (York, Don Valley)


Edwards, Charles
McEntee, Valentine L.



Greenwood, Rt. Hon. Arthur
Maclean, Neil (Glasgow, Govan)
TELLERS FOR THE AYES.


Grenlell, David Rees (Glamorgan)
Mainwaring, William Henry
Mr. 'D. Graham and Mr. G.




Macdonald.




NOES.


Acland Troyte, Lieut.-Colonel
Flelden, Edward Brocklehurst
Lovat-Fraser, James Alexander


Adams, Samuel Vyvyan T. (Leeds, W.)
Fleming, Edward Lascelles
Mabane, William


Agnew, Lieut.-Com. P. G.
Foot, Dingle (Dundee)
MacAndrew, Capt. J. O. (Ayr)


Albery, Irving James
Foot, Isaac (Cornwall, Bodmin)
McCorquodale, M. s.


Allen, Sir J. Sandeman (Llverp'l, W.)
Ford, Sir Patrick J.
MacDonald, Rt. Hon. J. R. (Seaham)


Applln, Lieut.-Col. Reginald V. K.
Fremantle, Sir Francis
McEwen. Captain J. H. F.


Apsley, Lord
Ganzonl, Sir John
McLean, Major Sir Alan


Aske, Sir Robert William
Gibson, Charles Granville
McLean, Dr. w. H. (Tradeston)


Atholl, Duchess of
Gillett, Sir George Masterman
Macqulsten, Frederick Alexander


Atkinson, Cyril
Glimour, Lt.-Col. Rt Hon. Sir John
Magnay, Thomas


Baldwin, Rt. Hon. Stanley
Glucksteln, Louis Halle
Munder, Geoffrey le M.


Banks, Sir Reginald Mitchell
Goff, Sir Park
Margesson, Capt. Rt. Hon. H. D. R.


Barclay-Harvey, C. M.
Goodman, Colonel Albert W.
Mayhaw, Lieut.-Colonel John


Barrle, Sir Charles Coupar
Gower, Sir Robert
Mills, Sir Frederick (Leyton, E.)


Beaumont, Hon. r.e.b. (Pertsm'th, C)
Graham, Sir F. Fergus (C'mb'rl'd, N.)
Mills, Major J. D. (New Forest)


Bernays, Robert
Grenlell, E. C. (City ot London)
Mitchell, Harold P.(Br'tf'd & Chlsw'k)


Bird, Ernest Roy (Yorks., Sklpton)
Griffith, F. Kingslcy (Middlesbro', W.)
Molson, A. Hugh Elsdale


Blinded, James
Grimston, R. V.
Monsell, Rt Hon. Sir B. Eyres


Bowyer, Capt. Sir George E. W.
Gunston, Captain D. W.
Moore, Lt.-Col. Thomas C. R. (Ayr)


Boyd-Carpenter, Sir Archibald
Guy, J. C. Morrison
Morris, John Patrick (Sallord, N.)


Broadbent, Colonel John
Hales, Harold K.
Morris, Owen Temple (Cardiff, E.)


Brocklebank, C. E. R.
Hamilton, Sir R.W.(Orkney & Zetl'nd)
Morris-Jones, Dr. J. H. (Denbigh)


Brown, Col. D. C. (N'th'l'd., Hexham)
Hanbury, Cecil
Morrison, William Shephard


Brown, Ernest (Lelth)
Hannon, Patrick Joseph Henry
Mulrhead, Major A. J.


Brown, Brlg.-Gen.H.C.(Berks.,Newb'y)
Harbord, Arthur
Munro, Patrick


Buchan-Hepburn, P. G. T.
Hartland, George A.
Nation, Brigadier-General J. J. H.


Burghley, Lord
Haslam, Henry (Horncastle)
Normand, Wilfrid Guild


Burgln, Dr. Edward Leslie
Haslam, Sir John (Bolton)
Nunn, William


Burnett, John George
Hellgers, Captain F. F. A.
O'Donovan, Dr. William James


Campbell, Edward Taswell (Bromley)
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Oman, Sir Charles William C.


Campbell, Vice-Admiral G. (Burnley)
Holdsworth, Herbert
O'Neill, Rt. Hon. Sir Hugh


Caporn, Arthur Cecil
Hope, Capt. Hon. A. 0. J. (Aston)
OrmBby-Gors, Rt. Hon. William G. A.


Carver, Major William H.
Hore-Bellsha, Leslie
Palmer, Francis Noel


Castlereagh, Viscount
Hornby, Frank
Patrick, Colin M.


Cazalet, Thelma (Islington, E.)
Home, Rt. Hon. Sir Robert S.
Peaks, Captain Osbert


Chamberlain, Rt. Hon.Slr J. A. (Blrm.,W)
Horsbrugh, Florence
Peat, Charles U.


Chamberlain, Rt. Hon. N. (Edgbaston)
Howard, Tom Forrest
Percy, Lore Eustace


Clarke, Frank
Hudson, Capt. A. U. M.(Hackney,N.)
Perkins, Walter R. D.


Clayton Or. George C.
Hudson, Robert Spear (Southport)
Pato, Geoffrey K. (W'verh'pt'n, Bllst'n)


Cochrane, Commander Hon. A. D.
Hunter, Dr. Joseph (Dumfries)
Pickering, Ernest H.


Cook, Thomas A.
Hunter, Capt. M. J. (Brlgg)
Pickford, Hon. Mary Ada


Cooke, Douglas
Insklp, Rt. Hon. Sir Thomas W. H.
Potter, John


Copeland, Ida
Jackson, J. C. (Hoywood & Radcllffe)
Power, Sir John Cecil


Courtauld, Major John Sewell
James, Wing Com. A. W. H.
Procter, Major Henry Adam


Courthope, Colonel Sir George L.
Janner, Barnett
Ramsay, Alexander (W. Bromwlch)


Craven-Ellis, William
Jesson, Major Thomas E.
Ramsay, Capt. A. H. M. (Midlothian)


Crooke, J. Smedley
Jones, Henry Haydn (Merioneth)
Ramsay, T. B. W. (Western Isles)


Crookshank, Col.C.de Wlndt (Bootle)
Jones. Lewis (Swansea, West)
Reld, David D. (County Down)


Crookshank, Capt. H. C. (Galnsb'rol
Ker, J. Campbell
Reld, James S. C. (Stirling)


Cruddas, Lieut-Colonel Bernard
Kerr, Lleut.-Col. Charles (Montrose)
Reld, William Allan (Derby)


Davidson, Rt. Hon. J. C. C.
Kimball, Lawrence
Remer, John R.


Dickie, John P.
Lambert, Rt. Hon. George
Robinson, John Roland


Donner, P. W.
Law, Sir Alfred
Ropner, Colonel L.


Drewe, Cedrlc
Law, Richard K. (Hull, S.W.)
Rosbotham, Sir Samuel


Duncan, James A.L.(Kensington, N.)
Leckie, J. A.
Floss, Ronald D.


Ellis, Sir R. Geoffrey
Leech. Dr. J. W.
Floss Taylor, Walter (Woodbrldge)


Elliston, Captain George Sampson
Lees-Jones, John
Rothschild, James A. de


Elmley, Viscount
Lennox-Boyd, A. T.
Ruggles-Brlse, Colonel E. A.


Emmott, Charles E. G C.
Llddall, Walter S.
Russell, Alexander West (Tynemouth)


Emrys-Evans, P. V.
Lindsay, Noel Ker
Rutherford, John (Edmonton)


Entwlstle, Cyril Fullard
Little, Graham-, Sir Ernest
Rutherford, Sir John Hugo (Llverp'l)


Ersklne, Lord (Weston-super-Mare)
Llewellin, Major John J.
Salt, Edward W.


Ersklne-Boltt, Capt. C. C. (Blk'pool)
Llewellyn-Jones, Frederick
Samuel, si- Arthur Michael (F'nham)


Essenhlgh, Reginald Clare
Lloyd, Geoffrey
Samuel, Samuel (W'dsworth, Putney)


Evans, David Owen (Cardigan)
Locker-Lampson, Rt. Hn. G.(Wd. Gr'n)
Sandeman, Sir A. N. Stewart




Sanderson, Sir Frank Barnard
Storey, Samuel
Ward, Irene Mary Bewick (Wallsend)


Shakespeare, Geoffrey H.
Strauss, Edward A.
Warrender, Sir victor A. G.


Shaw, Helen B. (Lanark, Bothwell)
Strickland, Captain W. F.
Waterhouse, Captain Charles


Shaw, Captain William T. (Forfar)
Sueter, Rear-Admiral Murray F.
Wedderburn, Henry James Scrymgeour


Shepperson, Sir Ernest W.
Sugden, Sir Wilfrid Hart
Weymouth, Viscount


Simon, Rt, Hon. Sir John
Tate, Mavis Constance
Whiteside, Borras Noel H.


Smiles, Lleut.-Col. Sir Walter D.
Templeton, William P.
Williams, Herbert G. (Croydon, S.)


Smith, R. W. (Ab'rd'n & Klnc'dine. C.)
Thomas, James P. L. (Herelord)
windsor-Clive, Lleut.-Colonel George


Smithers, Waldron
Thompson, Luke
Winterton, Rt. Hon. Earl


Somervell, Donald Bradley
Thorp, Linton Theodore
Womersley, Waller James


Somerville, Annesley A (Windsor)
Titchfield, Major the Marquess of
Wood, Sir Murdoch McKenzie (Banff)


Sotheron-Estcourt, Captain T. E.
Todd, Capt. A. J. K. (B'wick-on-T.)
Worthlngton, Or. John V.


Spencer, Captain Richard A.
Touche, Gordon Cosmo



Spens, William Patrick
Tryon, Rt. Hon. George Clement
TELLERS FOR THE NOES.


Steel-Maitland, Rt. Hon. Sir Arthur
Turton, Robert Hugh
Major George Davles and


Stevenson, James
Wallace, John (Dunfermline)
Commander Southby


Stewart, J. H. (File, E.)
Ward, Lt.-Col. Sir A. L. (Hull)

Original Question again proposed.

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[Captain Margesson.]

Committee report Progress; to sit again To-morrow.

SUMMARY JURISDICTION (APPEALS) BILL.

Reported, with Amendments, from Standing Committee B.

Report to lie upon the Table, and to be printed.

Minutes of Proceedings to be printed.

Bill, as amended (in the Standing Committee), to be considered upon Friday, and to be printed. [Bill 100.]

STANDING ORDERS.

Resolution reported from the Select Committee; "That in the case of the
Maldens and Coombe Urban District Council [Lords], Petition for Bill, the Standing Orders ought to be dispensed with:—That the parties be permitted to proceed with their Bill."

CHAIRMEN'S PANEL.

Mr. William Nicholson reported from the Chairmen's Panel; That they had appointed Sir William Jenkins to act as Chairman of Standing Committee A (in respect of the Road and Rail Traffic Bill).

Report to lie upon the Table.

MESSAGE FROM THE LORDS.

Local Government Bill,—That they communicate that they have come to the following Resolution: "That it is expedient that the Local Government Bill [Lords] be referred to a Joint Committee of both Houses of Parliament."

That they have passed a Bill, intituled, "An Act to make provision as to the abandonment of the tramways of the Rhondda Urban District Council and the termination of the leases thereof to the Rhondda Tramways Company, Limited, and of certain agreements between the Council and the Company; to empower the Council to acquire part of the motor omnibus undertaking of the Company at the end of a term of years; and for other purposes." [Rhondda Passenger Transport Bill [Lords.]

RHONDDA PASSENGER TRANSPORT BILL [Lords].

Read the First time, and referred to the Examiners of Petitions for Private Bills.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE A.

Mr. William Nicholson reported from the Committee of Selection; That they had added the following Twenty Members to Standing Committee A (in respect of the Road and Rail Traffic Bill): The Attorney-General, Sir Reginald Banks, Mr. Barclay-Harvey, Mi. Boyce, Mr. Buchan-Hepburn, Mr. Crossley, Mr. Clement Davies, Sir Philip Dawson, Mr.
Fielden, Lieut.-Colonel Headlam, Mr. Kirkwood, Mr. Parkinson, Lieut.-Colonel Powell, Major Renwick, Mr. Aled Roberts, Mr. Skelton, Mr. Oliver Stanley, Sir Arthur Steel-Maitland, Mr. Serymgeour-Wedderburn, and Mr. Graham White.

STANDING COMMITTEE B.

Mr. William Nicholson further reported from the Committee; That they had discharged the following Members from Standing Committee B: Lieut.-Colonel Acland-Troyte, Sir Paul Latham, Captain Peake, Sir Basil Peto, and Mr. Scrymgeour-Wedderburn; and had appointed in substitution: the Lord Advocate, Sir William Davison, Mr. Grimston, Mr. Hannon, and Mr. Herbert Williams.

Mr. William Nicholson further reported from the Committee; That they had added the following Ten Members to Standing Committee B (in respect of the Hotels and Restaurants Bill): Lieut.-Colonel Applin, Mr. Rhys Davies, Sir Francis Fremantle, Mr. Gluckstein, Mr. Hacking, Mr. George Harvey, Mr. Magnay, Sir Isidore Salmon, Mr. Bracewell Smith, and The Solicitor General.

Reports to lie upon the Table.

EXCHANGE EQUALISATION ACCOUNT BILL.

Order for Second Reading read.

9.49 p.m.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): I beg to move, "That the Bill be now read a Second time."
The Bill has one operative Clause and one distinct purpose. The operative Clause is to increase the Exchange Equalisation Account from 150,000,000 to £350,000,000, and the purpose, as defined in the principal Act, is to check undue fluctuations in the exchange value of sterling. To "check undue fluctuations in the exchange value of sterling" means that we should make it our objective to keep sterling in its natural commercial relationship with other currencies, undisturbed as far as possible by seasonal or speculative aberrations. How is the relationship of one currency to another determined? It is determined, of course, ultimately by the balance of payments, and no proposal which we could make to the House would interfere with that law. Under a Gold Standard the balance of payments is kept in equilibrium by the use of the bank rate. When the bank rate is raised an inflow of currency is encouraged, and when it is lowered lending abroad is stimulated. Up to 1931 we had a favourable balance of payments, and we, therefore, were able to keep our exchange in equilibrium. By the end of
that year we had an unfavourable balance of payments, but neither the raising of the bank rate nor the borrowing of money abroad was able to stem the drain on our resources, a drain aggravated by causes which it is not now necessary to explain.
We left the Gold Standard, and having left the Gold Standard our currency, instead of being automatically regulated, had like water to find its own level, and like water also it was apt to swell above or sink below that level. That would have been a matter of great inconvenience to our traders, and my right hon. Friend the Chancellor of the Exchequer had to devise a new technique for dealing with these variations. He devised accordingly that new technique when he established the Exchange Equalisation Account. The purpose of the Account, as defined in the Act, is to check these undue fluctuations, and it has served this purpose during the past year, at any rate up to the time of the recent disturbances which were not domestic in character. The hon. and learned Member for Bristol East (Sir S. Cripps) does not think that we ought to use the Exchange Equalisation Account for the purpose I have defined. On the Committee stage of the Resolution he pressed upon my right hon. Friend to consider whether it would not be much wiser to try and anchor sterling to wholesale commodity prices rather than continue to anchor it to some particular exchange. Or alternatively he urged him to go back direct to gold itself.
I have said enough to show that my right hon. Friend's intention never was, and never could have been, to anchor sterling either to the franc or the dollar. My right hon. Friend never set out to repeal the natural law of commerce under which the balance of payments
fundamentally regulates the relationship of one currency to another. But even if we take the hon. and learned Member's standard, the standard of commodity prices, we find that in this country commodity prices have been maintained stable. I have got out the figures for various periods of the year; I will only mention two; the period when the Exchange Equalisation Account came into operation and March of this year. Our wholesale price level was 97.7 in July, 1932, and it was 97.6 in March. There is no other industrial country in the world which has maintained a price level as stable as that. It may justly be claimed that the Account, together with my right hon. Friend's policy of cheap money and abundant credit, has provided us with this very satisfactory result, incomparable in any other country. Therefore, if the hon. and learned Gentleman for East Bristol wishes to be just, and wishes to judge the working of this Equalisation Fund by his own standard, he must admit that even under his direction it could not have been more satisfactorily worked.
The hon. and learned Gentleman, together with other hon. Members who spoke in the Debate, represented to the House that we were engaged upon a wild gamble in the exchanges, and that we were bound to lose money. Nothing could be further from the truth. The controllers of the Exchange Equalisation Fund do not set out at random to buy all the dollars and the francs on which they can lay their hands. The reverse is the case. It is, as my right hon. Friend explained, other people who are coming to this country to buy sterling. They want to find a temporary refuge for their capital. "Well," says the hon. and learned Gentleman, "Why don't you keep it out? Why don't you tax.it?" But he on reflection will appreciate that it is quite impossible to distinguish between money which comes here for legitimate commercial deposit, at any rate in the initial stages, and money which comes here for speculative purposes. If you were to endeavour to distinguish it, as the hon. and learned Gentleman desires, you would have to make the most elaborate and intricate inquiries, and each transaction would have to be certificated. Every country that has adopted that method of exchange control has suffered in its trade.
The hon. and learned Gentleman had another criticism to make of this Account. He says it ought to be used for the purpose of an expansionist policy at home. I would remind him that the Exchange Equalisatio:a Fund is designed to provide us with a liquid reserve whereby we can meet our obligations in respect of foreign short-term money. The fund acquires currency or currency worth in those countries which have sent short-term capital here. If we had used the fund to invest in houses, harbours, railways and docks, as the hon. and learned Gentleman suggested, we should hardly be in a position to offer buildings to those who wished to withdraw the money in this country, and satisfy them. I am sure the hon. and learned Gentleman will realise that it is our obligation to keep this money in a liquid form.
The hour is late, and I hope I have said enough to show that the fund has served its purpose during the past year. It has been appreciated not only by the traders of this country, but by the traders of other countries. It is important to emphasise that my right hon. Friend never had in mind the giving of an advantage to this country alone. The policy is national and international, and everyone dealing with this country derives benefit from it. It has maintained the exchanges fairly level during the past year, and if the House admits that it will not begrudge the increase. The scales have been held reasonably level. My right hon. Friend showed how suddenly one of the scales is liable to be overweighted, and it is for that reason that we ask for a counterweight of £.200,000,000. He gave to the House full particulars of how he reached that figure as a desirable total. If the House thinks that the fund has been worked satisfactorily, it will not, particularly at this juncture of events, deprive my right hon. Friend of the resources for which he asks.

10.0 p.m.

Sir STAFFORD CRIPPS: I do not propose to repeal; all the arguments that I put forward on the Committee stage of the Financial Resolution, but I would like, first, to answer one or two of the points that the Financial Secretary has put forward in criticism of what I then
thought I said, because I think he has slightly misapprehended one or two of the matters of which he spoke. I never suggested that the foreign Exchange Equalisation Fund should be used for an expansionist policy in this country. What I did suggest was that if there was £200,000,000 of money looking for a home it would be better to find it one in an expansionist policy than in the foreign Exchange Equalisation Fund, that there was already sufficient there for the purpose for which the Chancellor of the Exchequer wanted it, and if there was a further £200,000,000 which it was desired to use, it would be better to use it for an expansionist purpose in this country itself.
The Financial Secretary has said that I ought to be satisfied because the fund has succeeded in keeping sterling level on wholesale commodity prices. I am very satisfied that sterling has been kept level. But the hon. Gentleman has also stated that sterling has been kept substantially level on exchange value. He will no doubt appreciate that the only reason why it has been kept level on wholesale commodity prices is that they do not happen to have fluctuated on the other exchange value. The hon. Member cannot say that he has managed to keep the fund level on the foreign exchange and also on commodity prices unless the foreign exchange has itself been kept level on wholesale commodity prices. It is the only way in which you can achieve the two objects. My criticism was that, whatever may happen in this particular year as regards wholesale commodity prices and sterling values, the aim of the fund should be to keep sterling level on wholesale commodity prices and not to keep it level on one or more particular exchange.
I have never quite appreciated how the Chancellor of the Exchequer's object can in fact be achieved, that is, merely to iron out day-to-day seasonal fluctuations, without having any effect upon the long-term tendencies of foreign exchange. Let me give an illustration. Suppose that tomorrow the franc exchange rises. The Bank of England immediately operates to keep it down. How can the Chancellor of the Exchequer tell whether that rise is the result of day-to-day fluctuation or is the beginning of some general move-
ment which is the result of the balance of payments between this country and France? I suggest that the right hon. Gentleman is wholly incapable, and that everyone is incapable of telling which of those two tendencies is in fact operating upon the franc At the particular moment.
The history of the last week or so, as regards the franc exchange, shows very clearly that that is the case. According to the financial papers francs have been bought in very large quantities by the foreign Exchange Equalisation Fund in an attempt either to support the franc or to keep down the price of sterling, whichever you call it. For instance, in the "Statist" of 6th May I see the following, dealing with the exchange fluctuations of francs:
The story of the exchange rates these past 14 days will offer to posterity a very vivid reflection of the repercussions of the American abandonment of gold. In general, it reveals a steady weakening of the dollar, a drift of capital to sterling from the Continent, followed by energetic measures on the part of smaller Continental central banks to defend their rates on Paris, equally energetic action on the part of the Bank of England to keep sterling down on Paris …
That surely is a perfectly clear statement that the Bank of England, of course through the operations of the Exchange Equalisation Fund, was intentionally operating to keep down what would otherwise have been a tendency, whether speculative or long-term, and in keeping down the sterling rate on Paris it seems to me impossible to distinguish at a particular date as to whether in fact you are operating upon some long-term tendency, or upon some speculative tendency, or upon some short-term tendency.
There is another point as to which I should like some elucidation. When the hon. Member says the object of the fund is to check undue fluctuations in exchange, which I think are the words of the Act, what exchange value does he mean? At the present moment is it the exchange on dollars, the exchange on marks, or the exchange on francs? Is it, in other words, the exchange on those countries which are still based on gold, and is it, therefore, in effect an indirect attempt to stop the fluctuation of sterling on gold; or is it to be used in the future, now that the dollar is off the Gold Standard, to attempt to regulate the exchange on America, which, of course, is
a completely different proposition, as the hon. Member will appreciate? I am sure the House would like to know, in view of those altered circumstances—last year it was assumed that it would be used on the dollar and franc exchange, both of which were on gold—when the hon. Member speaks about fluctuations in the exchange value of sterling, what exchange value he means. Is it the franc, or the dollar, or something else? Quite clearly it cannot be both the franc and the dollar.
The right hon. Gentleman the Chancellor of the Exchequer must have his mind upon one type of exchange f uctuation, and as far as one can see from the course of the last few weeks since America went off gold, the operations have been designed to keep the exchange value of francs constant, and it is obvious that that must be what is being carried out. That, of course, brings one into very great difficulties and liabilities to misunderstanding so far as the dollar exchange is concerned, and I ask the right hon. Gentleman whether, in view of the imminence of the World Economic Conference, and in view of the suggestion now for a Tariff Truce, it does not appear rather unwise to take this hasty action, to acquire this new economic weapon, which may be used unintentionally, or may operate, if I may put it in that, way, to start upon some form of competition between the gold value of the dollar and the pound.
In view of the fact that the right hon. Gentleman told us that for the mere ironing out of exchange the present fund was sufficient and did not require any reinforcement, would it not be wiser to allay the suspicions of America and of France that we are operating in an economic war, via the exchanges, preparatory to the World Economic Conference, and to hang this matter up—it cannot be a matter of very great urgency—so that all these suspicions, though quite ill-grounded, I have no doubt, from what the right hon. Gentleman said, at least can be disposed of and will not be there wihen the Conference meets. He will appreciate that unrealities are very often just as dangerous to conferences as are realities, and the suspicion has been raised in the financial Press, in America and elsewhere, that this is a weapon which is being hastily acquired in order that we may be
well prepared to enter the Economic Conference upon this monetary problem.
Would it not therefore be wiser not to make use of this weapon now, even if he thinks he must have it eventually, and to let this matter at least stand over until after the Conference on the same basis that the tariff truce is apparently to allow any further activities of the Tariff Advisory Committee to be suspended until after the Conference? I make that suggestion because the right hon. Gentleman did say that the £150,000,000 already in the fund was sufficient for the day-to-day work, and that this extra sum was required for another purpose, namely, to deal partly with seasonal tendencies, the autumn and spring tendencies, and partly with this bad money which is apt to circulate and to come into this country. That is not likely to raise any acute difficulty until after the World Economic Conference, one imagines.
There is one other matter about which I should like to say a word or two. I understand, from what the Prime Minister said this afternoon, that we are to work upon lines analogous to those of the United States of America, and surely, if that is so, this money ought to be used, not for the purpose of equalising or stopping fluctuations in exchange, but for the same sort of purpose that the inflationary money is being used in America, that is to say, for the purpose of public expenditure, for placing in industry in some way or another by the Government, in order to lead to an internal inflation, and it ought not to be put into a foreign Exchange fund where it will not have any inflationary effect such as it is anticipated the American money will have and is intended to have.
As I appreciate the American action, it is intended primarily to have an internal inflationary effect. It may and will, of course, have an effect on the external trade of America, but that is not its primary purpose, which is to get money circulated in America, in the industries and among the consuming population of America; and Mr. Roosevelt has stated that it is an antecedent condition that there should be a rise in wages. That is a very important factor. He urged the other day that even before the inflation takes its effect, the manufacturers and others should give an immediate rise in wages in order to in-
crease consuming power, and if our Government would do what they have been urged to do on many occasions, and now that Mr. Roosevelt has given them the lead for which, apparently, they have been waiting, having no lead to give themselves, they might use this money for the purpose of public works, social services, and so on, and at the same time take care to see that salaries, wages, and so on are all increased, bringing themselves into line with Mr. Roosevelt's action in America, and thereby bringing about what apparently they desire, namely, an inflationary policy throughout the world.
Whether that is ever going to do any good in the long run, apart from having some slight kick or reaction for the moment, is a matter which history may or may not show, depending upon whether such a step is taken. We do not believe that any of these devices are going to cure the present ills of unemployment, but if this money is to be raised, as it is, we suggest that it should not be used in a foreign Exchange Fund, to stabilise an exchange, but that it should be used in accordance with the American precedent, so that we may keep in step with America and may use the money for an expansionist and wage-raising policy.

10.15 p.m.

Captain CROOKSHANK: I am in exactly the same position as the hon. and learned Member for East Bristol (Sir S. Cripps). I also know nothing about high finance, but the Second Reading of this Bill brings us back to one or two first principles with regard to the House of Commons to which I would direct the attention of hon. Members. The Financial Secretary told us that three things had brought great benefit to the country, namely, the Exchange Equalisation Fund, cheap money and abundant credit. However true that may be, neither cheap money nor abundant credit have anything to do with the Bill. Then the Financial Secretary, in the form of a rhetorical question, suggested that if the House thought that the system set up last year had worked satisfactorily, we must give the Bill a Second Reading. That is begging the question. One of the things which the House is not in a position to know is whether the activities of the fund
during the last 12 months have or have not been satisfactory. But if we judge it by a very simple question. the fund was set up to stabilise the exchange. Has it done so? No. Therefore, there is a direct negative to the question which the Financial Secretary put to us.
The general exchange situation to-day is not what it was when last year's Finance Bill was passed. Whether the effect of the Exchange Fund has been to make it a little more one wa), or a little more the other, is a matter for argument. The fact remains that it has not stabilised itself. But the Chancellor of the Exchequer said the fund has made a profit. It may have done so, but that is an entirely irrelevant consideration. It was not set up to make profits, but to stabilise exchanges. Suppose that a farmer set himself to stabilise his stock so as to win first prizes at all the county shows, but for some reason the stabilisation scheme did not work out and the bulls or the cows did not get first prizes but only seconds and thirds. He might turn round and say—on the analogy that gold is filthy lucre—"Yes, but we did make a bit of profit out of stable manure." Of course, it would be completely irrelevant, but it strikes me that it is just as irrelevant to say that this fund which was set up for quite a different purpose happens to have made some profit of an unknown amount—it may have been only Sufficient, however, for the Chancellor and the Financial Secretary to say that it was on the right side.
That is what has brought me to my feet. It is monstrous that the House of Commons should be asked to deal with any fund in this way. I admit that in these high financial matters I know nothing. Nor do the great majority of this House. Nor, I suspect, do some who sit above the Gangway. To put it in another way, suppose the Chancellor of the Exchequer or any Minister were to come down to the House, as they might very well do, and say they wanted to borrow £200,000,000 for housing. Would not this House at once begin to tack on every kind of condition? Would not hon. Gentlemen opposite have discussions about fixed baths and parlours, and would not there be questions as to what the local authorities auditing officers have to say about the matter? Would not the
House want to be consulted at every stage? It may be that we all think in vast figures to-day, but to increase this fund from £150,000,000 to £350,000,000 is no light thing for the House of Commons to do, considering that at no stage of the proceedings has the House had a word to say in the matter. Last year the then Financial Secretary, possibly in a moment of Scottish expansion, told us that before the Finance Bill of the year was discussed:
All these matters will be brought under review. At that time we can discuss the matter with advantage of the knowledge of nine months' working of the Account which will be open to all of us"—
I do not know to whom it has been open, but not to all of us—
not in a scrutiny of the books of the account but in the working of the exchange from day to day."—[OFFICIAL REPORT, 9th June, 1932; col. 2235, Vol. 266.]
If we take it on that ground, and take the exchange on 9th June, 1932, and take it to-day, we find that there has not been any stabilisation, but that there has been an unknown profit. I understand from the speech which was made by the right hon. Gentleman the other day that of course there was no question of a big stabilisation. That, I thought, we understood last year, but the phrase this year was "ironing out." That was not the phrase last year. It is all very well ironing out, but how long do you iron for? [Laughter.] I am sorry that hon. Members think that that is funny, but it is very serious; it is the whole gist of the matter because the Financial Secretary says that it is very advantageous to traders to know that the fund is working for ironing purposes. Unless, however, they know that it is going to iron for a definite period ahead I do not see that it is going to be any use to them. They would like to know a month ahead if they could, but they cannot. The fund will not make any difference to them. As I see it from the experience of the last few months, and more. particularly of the last few weeks or days, these matters depend upon entirely different movements. They may be political reasons in one country or political reasons in another, but certainly not the existence of this vast sum at the disposal of some unknown advisers of the right hon. Gentleman.
Let the House remember that we do not even know who manipulates this fund.
We have never been told that. When the United States went off gold at that opportune moment when the Prime Minister was on board ship and therefore without his knowing it, their action was surely for the time being sufficient to wreck any theory as to stabilising exchanges from the point of view of one country doing it. Surely the Prime Minister and the Government are abundantly right when they say that these matters must be dealt with internationally. That is the prime reason for the World Economic Conference. Of course, they are right about that; no sane man would deny it; but, because they are right about it, it does not follow that they are right in asking from this House a blind Vote of this vast loan for an unknown purpose in the meantime. Is it a sort of mass manoeuvre? Is it the G.H.Q. reserve for the Economic Conference? Are they going to throw it in at the last minute? Surely not. If they want an international roulette, let them have it and let the Chancellor be the chief croupier, and let them gamble in the Geological Museum as much as they like, but do not let them ask the House at this stage of the proceedings to give them this blank cheque when they refuse to give the House any kind of authority as to the way in which this money is. spent.
I press in the same way as I did last, year that if the Government feel, as I suppose they will—for I have no doubt they will have a large majority if they take it to a Division—I hat they must have-money, though some of us doubt it, I beg to them to try and think out some way-in which they can leave to this House some control in the ultimate as to what happens. Last year it was promised in reply to an Amendment of the hon. Gentleman the Member for Caerphilly (Mr, Morgan Jones); with which I was associated, in as definite a way as could be made, but nothing happened. There is no authority in this Ho-use, there is no Member who has any inkling as to how this fund has worked. I put it to Ministers on the Front Bench that it is the worst kind of precedent which they could establish to come to the House to ask for authority to borrow this vast sum of money -without any control of the public at all. Each of us here is a Member of Parliament representing the taxpayers—it is our prime functon—and they are just as much entitled as any of us to
know how the Government spend money for which it asks authority from this House.
In this case £150,000,000 was asked for last year. A profit of unknown dimensions was made. Because there was a profit one would have thought that probably they would have had enough with which to carry on, but now they want more. We have had no distribution of any part of the profit and they want more money. If the House is willing to give it, for the reasons which the Chancellor of the Exchequer has expressed, I cannot stop it, but I do beg of the Government to take note that there are many hon. Members, both vocal and otherwise, who feel that the prime function of this House is, as always, to watch the interests of the taxpayers. Some system should be devised, which it is not beyond the ingenuity of the Chancellor of the Exchequer to devise if he sets his mind to it—anyone who could produce the formula he drew up for the Local Government Bill could certainly do it—by which some information could be vouch safed to the House and some kind of ultimate control still kept in the hands of hon. Members. For that reason I raise my voice, as I did last year, to beg of him to go very carefully in this unprecedented action he has again taken this year.

10.27 p.m.

Mr. ALBERY: Last year I was one of those who asked the Chancellor that some information concerning this fund should be put periodically before the House. I do not remember that on that occasion any adequate reason was given for refusing to do so. A quotation was read out from a speech made by the President of the Board of Trade in which it was suggested that if nine or 12 months after the event the state of the fund was revealed, speculators would still be able to take advantage of the position to operate in exchanges. I cannot conceive how the most clever speculator would be able to assist himself materially in operations in exchange by being made aware of the state of the fund—not even being told the details of the transactions—as it existed some nine or 12 months earlier. Personally, it has been a source of amazement to me that this House last year and
again this year should pass legislation which enables £350,000,000 to go entirely outside its control without at the same time insisting on some provision which will ensure that from time to time it has an accurate account of what the state of the fund was at some definite period.
This Government is different from any other Government. It did not come into office bound by any particular policy, but with a free hand, and it is my view that we who support it, and were elected to support it, have on that account not a less responsibility but a much greater responsibility than otherwise we should have. Generally a member elected to support a Government knows exactly what it has been pledged to do; he knows what its policy is and the country knows what its policy is; and therefore one might say that to that extent the responsibility of an individual member is considerably lessened. That is not the case here. I realise that the Government have special reason to be aware of the fact, and that their supporters ought on all occasions to give them loyal support, but just on that account it is more necessary that they should give a willing ear to those who feel—especially as this opinion is largely shared—that they are doing something which is not wise and not in accordance with the ideas of many of their supporters with regard to proper procedure.
The situation of the Exchange Equalisation Fund to-day is materially different from last year, when we wero told that it was for ironing out inequalities in the exchange. That was a new term. I think that the fund has been successfully applied to that purpose. It is fairly easy to understand that it could be so applied, and one thing was that we knew what we had to iron out, and there Was no doubt about it. The Exchange Fund was to iron out, from day to day, the currencies which were fixed to a gold standard, and it was not necessary, as the hon. and learned Gentleman for East Bristol (Sir S. Cripps) says, to have any clear idea of what the exchange was going to do. The object of the fund was merely to prevent unduly large fluctuations and not to prevent fluctuations. On the other hand, I do not find anybody to-day who knows how the fund is going to be used and whether it is going to iron out against dollars or francs. I do not sug-
gest that it is desirable that the Government should endeavour, even if they can, to give this information. We are living in a very critical period, and I have no doubt that the Government would not ask for £200,000,000 if they had not a good reason.
I should, however, have thought that there was an easier way of modifying the speculation in exchange. I have always been given to understand that all the speculation in exchange takes place. in forward exchange operations, and I should have thought that control of forward exchange operations would reduce speculation in exchange to a minimum. That would require a very much less sum. I put it to the Chancellor of the Exchequer that he should make a suggestion by which this House may retain some kind of control over this fund, and by which it should be informed from time to time how the fund stands. One might, it is possible, lose £50,000,000 or £100,000,000, or might make £50,000,000 or £100,000,000, and I for one should like to know. I think that would be better for everybody, in a world where most things have been totally unforeseen. The fact that America went off gold the other aay was a calamity in many respects. It would have been a less one if one had been able to foresee it more accurately. It is just as important for the good of trade and commerce in this country that we should have some idea of how things are going with this fund, even when they are not going well. It might be said that the Fund is to stabilise and help to bring about a great degree of confidence. I have never known any operations in the past which were secret that have ever added to confidence. So far as I know, the reason why the figures of the Bank of England are published periodically is that the publication of them is supposed to inspire confidence.

10.34 p.m.

Mr. ANEURIN BEVAN: I have listened to the last two speakers with admiration. I sympathise with and understand the criticisms that have been made from the benches upon which I have the honour to sit, but I cannot understand what justification there is for two hon. and presumably patriotic Members on that side stabbing the Government in the back at a serious time like this. Surely the hon. Members have realised that the country is at war, and that the
only people who have the right to be unpatriotic are those on these benches; we have staked out that claim for ourselves. We have seen in the last 20 years the greatest war in the history of our time. We have also seen the greatest tariff war, and now we are seeing the greatest exchange war. I cannot understand the apparent unsophistication of my hon. Friends opposite. They must realise that it is impossible for the Chancellor of the Exchequer to disclose his plans. He cannot disclose his plans here without at the same time disclosing them to France and America. We are at war, and he is entitled to the greatest secrecy about this matter.

Captain CROOKSHANK: The hon. Member will recollect that in time of war commanders-in-chief always publish their dispatches about six or eight months after the battle.

Mr. BEVAN: The battle is still joined; the verdict has not been declared; the poor Chancellor of the Exchequer is not in a position to declare his plans. France, America and Great Britain are at the present time engaged in manoeuvring for position at the Economic Conference, and it is unfair for hon. Gentlemen who should be patriotically defending the National Government to embarrass them by asking them to disclose their plans beforehand. I think I am entitled to complain of such unpatriotic conduct.
The United States complained, when we went off the Gold Standard, that we did so, not because we were compelled to do so, but in order to try to stab their export trade. They complained that it was a part of our tactics to gain a larger share of so much of the world's market as was going to be divided up. The right hon. Gentleman the Member for Hillhead (Sir R. Horne) has on several occasions deplored the deflationary policy of the Government, because it has hit the producing interests in Great Britain. He is ostentatiously silent on this occasion, but he knows very well that the Chancellor of the Exchequer is now engaged in the opposite tactics, that he is now attempting to put a bounty on exports and a limitation on imports in order to try to secure for Great Britain as large a share of the world market as possible. What the Conservatives are complaining about I do not understand.
They complained against the Prime Minister to-day. I heard mutters behind me, and mutters all around me, that the Prime Minister was not putting the tariff high enough to provide them with good bargaining powers at the Economic Conference. But the Prime Minister did not need to raise the tariff walls of Great Britain, for he has instructed the Chancellor of the Exchequer to engage in an exchange war for the same purpose. The increase of the Exchange Equalisation Account to £350,000,000 will be quite as effective for Great Britain's purposes as raising a tariff barrier, and, indeed, even more effective. The accumulation of gold in the Bank of England is the expression of the Chancellor of the Exchequer's refusal to take goods.
We have been informed by the Chancellor of the Exchequer that he wants the additional £200,000,000 because there is an enormous amount of bad money in the world and a great deal of that bad money is finding its way into Great Britain. We were informed that we had to go off the Gold Standard because we had too much bad money. We are now informed that it is because we are off the Gold Standard that we are having the bad money coming here. I am really in a great difficulty in understanding these mysteries. Every one, however, realises that the accumulation of gold which has been bought by the Bank of England to prevent the value of sterling rising is not equivalent to the amount of bad money supposed to be deposited upon short call in London. Even the Chancellor of the Exchequer, extravagant though his claims have been, would not suggest for a moment that the accumulations of gold in the Bank of England are equivalent to the amount of short-call money on the London money market or the amount of bad money. He knows very well that the poor Governor of the Bank of England has been compelled to buy gold. It is not safe to buy anything except goods. You cannot buy dollars. If you bought too many dollars you caught it in the neck when America went off gold. My hon. and learned Friend the Member for Bristol (Sir S. Cripps) has been pointing out that now we are engaged in a war with the franc. We are bound to fight the franc. It is the only currency left on gold. But we dare not speculate too
much with the franc. What is the poor Governor of the Bank of England going to buy?
This fund is not being used for the purpose of ironing out day-to-day fluctuations in the value of sterling. It is being used as a new mode of economic war. It is being used against France and against America as a means of competing for the ever contracting world market. It is a manoeuvre for the Economic Conference. The hon. and gallant Gentleman shakes his head. He had an opportunity. Did he venture any theory at all as to what it is being used for? He suggested that it might still be used for ironing out the fluctuations in sterling, but he wanted to know for how long the ironing was going on. The ironing will go on until the Economic Conference is over. This is a very grave situation. Look at America? Why did America go off gold? America had £900,000,000 of gold. She could not meet all her outgoings in gold without disturbing her internal position. No one suggests that America could have met her internal currency by gold payments. She never had anything like an eighth of the gold necessary to meet her internal obligations. She did not require gold for internal purposes, but she had £900,000,000 when she went off the Gold Standard. Why? No one suggests that, if all the short-call money had been withdrawn from New York, it would have depleted the American gold reserve to anything like a perilous level. America went off gold because she had decided to inflate internally, and she could not risk inflating internally without running the risk of Great Britain dumping goods into the American market.
President Roosevelt armed himself for the Economic Conference by saying, "I propose to inflate my internal currency so as to wipe out the rentier and the moneylender who has crushed the economic life into paralysis, but I dare not run the risk of raising the price level in America while on the Gold Standard and encouraging the dumping of goods into the country. At the same time, I dare not put up the tariffs, because it would put America in a very foolish position at the Economic Conference. I will do the next best thing. I will go off gold, and by going off gold restrict the importation of goods into America." I do
not see what complaints hon. Members have against the poor Chancellor of the Exchequer who is entitled to give Great Britain the same weapon with which President Roosevelt has armed America. We are at each other's throats like Kilkenny cats, and we all might as well have the same sharp claws.
I protest against the Chancellor of the Exchequer getting up in the House of Commons and saying that he does not want the Exchange Equalisation Account for carrying on an exchange war. For what purpose does he want it? He wants it for no other purpose. He knows that very well, and it is a lot of cant and hypocrisy to come to the House of Commons and suggest that he wants it for any other purpose. You are manoeuvring for position. I challenge the right hon. Gentleman and any right hon. or hon. Gentleman in the House to get up and point out that the Exchange Account is wanted for any purpose except for an economic war which is embittering national feeling and which is likely, in the course of the next two years, to bring the world to the verge of the greatest catastrophic outbreak humanity has ever seen. The suggestion is made that we might have an inflation policy in Great Britain. You cannot have an inflation policy in Great Britain without running the risk of having goods dumped into Great Britain. It was explained in the House with the greatest precision and cogency by the right hon. Member for Hillhead, by the Foreign Secretary, and by a large number of hon. and right hon. Gentlemen in my hearing, that the one great danger for this country, having gone off the Gold Standard, was to have a rise in internal prices. We had lost the sheet anchor, we had lost the linchpin, we had been cut loose from our moorings, and unless we guided the ship with the greatest possible care we should go on to the rocks. So we had to deflate. Deflation in Great Britain has been rendered necessary because we have ourselves gone off the Gold Standard. If we inflated in Great Britain the consequence would be to encourage dumping of goods into Great Britain. We dare not inflate at the moment because the Exchange Equalisation Account we can accumulate will not be large enough to prevent the dumping of goods into the country.
The suggestion has been made from all quarters of the House that the Chancellor of the Exchequer should embark upon a great construction scheme in Great Britain. There is considerable support for it. I would support it. But suppose he embarked upon a construction scheme of that description and there were rising internal prices as a consequence, the effect would he to encourage the importation of goods into Great Britain, and we should either have to put our tariff walls mountainously high to prevent it, or do our best to keep the value of sterling as low as possible in the world market, just as President Roosevelt is doing, in order to prevent the dumping of goods here. I am sure that hon. Members will see that we are in the inextricable difficulty that in Britain we cannot possibly inflate. Internal inflation, we are told by everybody, is absolutely necessary for the maintenance of the capitalist order and to wipe out all rentier claims, but we cannot accumulate an Exchange Equalisation Account of any size large enough to enable us to inflate in safety.
I suggest to the Chancellor of the Exchequer that the only safe thing for him to do is to go quietly on the road he is going at the moment. The poor man is in the more dreadful difficulty, and the only hope he has is that the road to the cemetery is longer than the road which America will have to travel, and that America will reach the graveyard before he does. You have no hope of ultimately escaping the cemetery, but you hope that your rivals will reach there before you do. I am, therefore, suggesting that if we are to have any reality at all in these Debates, we should discuss this from the point of view of what is the real intention of the Chancellor.
I will put some specific questions to the right hon. Gentleman. What is the cause of the continuous accumulation of gold by the Bank of England? If this accumulation is not the expression of the long-term policy of the Government, what is it? If it is the expression of that policy, what is that policy? Is it to get the value of sterling down below the point at which it is justified by the balance of payments, and, if so, what is it for? Is it intended at the international Economic Conference to arrive at a new parity with the dollar, and, I so, how is the parity to be arrived at? We have been told
by the Prime Minister that at the World Economic Conference an attempt is to be made to arrive at a new gold parity. We are entitled to know at what point that gold parity is to be fixed. Do we understand that at the moment the accumulation of gold is designed to fix that gold parity at as favourable a position for Britain as possible?
I would not object to it—nobody does—but I do suggest to the House that if that is the case, there is no need to approach the Economic Conference in any other spirit than the spirit of gladiators armed to the teeth, providing themselves with, all the appurtenances of war. Is it to be a tourney or joust of armed knights, each one hoping to escape with the trophies of victory? If the Chancellor will state that frankly, we will accept it from him and that Britain is engaged in an exchange war, but, for heaven's sake, cut out the cant and hypocrisy that you are asking the House of Commons for anything at the present time except an addition of £200,000,000 to the war chest of Britain.

10.55 p.m.

Mr. MACMILLAN: I do not rise for the purpose of following in detail the paradoxes of the hon. Member who has just sat down. It is true that he has not played the part of a kind and genial Cassandra. He enjoys prophesying the imminent fall of the capitalist system and is prepared to play a part, any part, in its burial except that of mute. I rise only for the purpose of asking, or underlining, a question already asked, to which we are entitled to an answer from the Government, as to what really is the purpose of this fund. In what final form do they propose to administer it? It is suggested that there is a short-term purpose and a long-term purpose for a fund of this description. The short-term purpose, as the hon. and gallant Member for Gainsborough (Captain Crookshank) said, is to iron out the temporary difficulties and fluctuations in the rate of exchange. As regards that object of the fund, most hon. Members must wonder—of course, we have not the advantage of seeing the account—if it is true that considerable profits have already been made why such large additional amounts are required for this comparatively limited purpose. We all know the form of gambler who says:
"I have done very well, but I should like some more money with which to go on gambling." If it is really necessary to make this very substantial addition to the total amount involved in the fund, surely it must be that the long-term purpose is the more important part in the real object which the Government have in view.
I do not know whether the Chancellor of the Exchequer can tell us, but I take it that the long-term purpose is to prevent an undue rise in the value of sterling. I do not wish to raise any awkward difficulty, but I do feel that the House is entitled to some explanation as to the attitude of the Government, who are so cautious in their internal policy and so speculative in their exchange policy. When we ask for some quite small sums of money compared with this sum to be embarked in internal schemes, in development, in loan expenditure and the like, we have an attitude from the Government which is that of the cautious caretaker of the national funds. We have a rigid, oblique and austere Budget. We may not speculate in any direction, but when we come to this unaudited fund, then we have a very much more genial and expansive spirit, and the Chancellor of the Exchequer, who is so rigid as to what we can do in our internal expenditure, is prepared to risk these very considerable sums in what is, after all, a merely speculative undertaking on the exchange. It reminds us of a character we all know about, the person who objects strongly to any form of modest raffle at a church bazaar in England, but who, on his holiday, gambles at Monte Carlo.
When we ask for money for expansive purposes in this country we are told that it is impossible, but when we are dealing with external affairs we cheerfully vote £200,000,000, a sum equivalent to one-quarter of the national Budget, practically without consideration and Debate. I am not one who by nature or character objects to this speculative attitude of the Chancellor of the Exchequer, but I suggest that if the long-term purpose of the Account is to prevent an undue rise of sterling, if we are anxious that there shall be no successful attempt by speculators to get an undue rise in the international value of sterling, surely there are other methods by which that
could be achieved. The Governor of the Bank of England has been buying gold. I am not at all sure that the same effect would not be obtained by buying houses for the people of England, and it is arguable that you would at least have the advantage of having the houses instead of being left with a commodity which may be of little value. I do not wish to press that argument too far. I know the immense difficulties before the Government at the present time, and it may be very difficult at the World Conference to take a determined line of policy, but I hope that we shall not be told in future, when we are pressing for a rather more expansive policy with regard to our internal development, that there is no money available, that the cup-board is bare, that there is nothing that can be risked, that no risks of any kind are to be undertaken, and at the same time vote £350,000,000 for the purpose or gambling in the future values of the exchange.

11.3 p.m.

Mr. MABANE: I want to mention briefly the point put by the hon. and gallant Member for Gainsborough (Captain Crookshank). The fund has not prevented short term fluctuations of the exchange or prevented long term fluctuations on the exchange. It has kept the exchange down in terms of the £ with the dollar, and now that the dollar has gone it is being used to keep down the value of the £ in terms of the franc until the franc goes down. The point I want to mention is that of the profit. It has been generally assumed that the account has made a profit. This was the point made last year, and I want to remind the Chancellor of the Exchequer of some words he uttered when he introduced this proposal. He asked this question of himself:
Will these operations involve the Exchequer in a loss? …. I think the answer must be that that is a very conceivable possibility."—[OFFICIAL REPORT, 19th April, 1932; col. 1428, Vol. 246.]
We have been told that this year the account shows a profit. Of course it does, if you could realise at the present price of gold; but that is not the point. The point is whether it will show a profit when it is wound up. Last year we were responsible for securing an alteration in the conditions under which the fund is to be wound up, and the
Chancellor of the Exchequer in connection with the ultimate fate of the fund, said:
If, in the long run we were to return to gold in such a way that the pound stood at a higher gold value than the average level at which purchases of exchange had been made, the transactions would inevitably show a loss."—[OFFICIAL REPORT, 19th April, 1932; col. 1428, Vol. 246.]
My objection to this Account is that the Account must inevitably show a loss, unless the pound is eventually stabilised at a gold value something like the present value of gold. One cannot tell exactly, but one presumes that gold and gold exchange have been bought on behalf of the fund during the past year at a price of something like £5 15s. and upwards.
I ask the Chancellor of the Exchequer this specific question: If the pound is eventually stabilised at a higher gold value than that, will the fund make a loss when it is wound up? If he says that it will make a loss, I go on to ask the House whether there is the slightest likelihood of America agreeing to a stabilisation of the dollar at an exchange value of about 3.40 to the pound? If the House agrees that there is not the slightest likelihood of America agreeing to that, you are driven into the position that the Account when wound up must make a loss. We have these ready assurances from the Front Bench that the Account shows a profit at present. Of course it is a purely paper profit, based upon the artificially high price of gold at the moment. The real point of importance is whether the Account will show a profit or a less when it is wound up. On the Chancellor's own statement last year it must inevitably show a loss and a very considerable loss. On those grounds, and on those mentioned by the hon. and gallant Member for Gainsborough, I very strongly object to this Bill.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I am certainly not one to under-rate in any way the importance of the measure contained in the Bill. It relates to a very large sum of money and must affect the interests of British industry and trade. But the Bill has been made the text for considerations which really have very little to do with it, and I do not intend to follow at any length some of those considerations. With the best will in
the world I am afraid that I could not follow all the excursions and divagations of the hon. Member for Ebbw Vale (Mr. A. Bevan), because I only understand two of his statements. First of all he accused me of not having told the truth. He said, moreover, that I knew I had not told the truth, and that I was only exhibiting cant and hypocrisy in my statement of the intention of the Bill. Another thing I understood was that he himself did not understand matters of high finance.
With regard to the hon. and learned Member for East Bristol (Sir S. Cripps), he suggested that we must, in the operation of this fund, find it impossible to tell at any moment whether a variation in the exchange was due to some temporary fluctuation or was the beginning of a more permanent step. I certainly am not disposed to deny that those who are operating the fund have great experience, and I do think that as a rule they have a pretty good idea as to which of these two things it may be. But they cannot be certain first of all. They have perhaps to assume in the first instance that it is only a temporary movement, but presently they may make up their minds that it is something more than that, and in that case they would not attempt to prevent what is, of course, quite beyond their powers to prevent, if they wished to do so.
He went on to suggest that we must be in some difficulty because of the fact that America had gone off gold, and he asked what exchange we were following. Of course, we must have regard to the countries on the gold exchange, and although for the time at any rate the dollar is not on the gold exchange and, therefore, we cannot pay attention to the relative values of the pound and the dollar, we must look to those countries which still remain on gold. Then the hon. and learned Gentleman suggested that if money to this extent was looking for a home, it might be spent much more advantageously on an expansionist policy than in the Equalisation Fund. I think that there he was not distinguishing between short-term money and long-term money. This is short-term money. When you come to deal with a policy of expenditure upon public works, then you have, of course, to deal with long-term
money, and there is nothing in what we are asking the House to sanction here which will interfere with the supply or the use of long-term money.
The hon. Member for Stockton (Mr. Macmillan) seemed to be a little nettled at what he termed an inconsistency on the part of the Chancellor of the Exchequer. I believe that those who have been crossed in love are always a little ill-tempered for some time afterwards, and I conceive that the hon. Member is smarting a little under the disappointment which he experienced over the Budget, but if he would be kind enough to read the speech which I made when moving the Resolution governing this Bill, when I think he was not here, he would see that I answered, by anticipation, the little difficulty which he has put before the House to-day. As a matter of fact, there are not two purposes in this Bill. It is not the case that there are a short-term policy and a long-term policy, except in this sense, that some of the fluctuations that we are trying to deal with are fluctuations which may take place from day to day or from week to week, and others are fluctuations which arise for longer cycles or periods of time—those seasonal fluctuations, for instance, the peaks of which come in the spring and autumn respectively, and of which I spoke on the Resolution. I should not call that a long-term policy, although they are longer-term fluctuations than the shorter fluctuations which may be produced by temporary speculative efforts.
Let me say that, although the situation has been described as one of war, if there be any war, it is not a war between this Government and the Government of any other country. If we are carrying on any war, it is a war against certain individuals who are, for purposes of their own convenience or their own profit, attempting to use the exchange to the detriment of this country, and it is to defend the people of this country against movements by individuals, or collections of individuals if you like, of that kind that we are asking the House to give us this Bill.
I would like to say a word on the question raised by my hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) and also by my
hon. Friend the Member for Gravesend (Mr. Albery), who referred to the position which they took up last year, when they stated that it was unreasonable and must be unconstitutional for the Government to ask the House to sanction the extension of the resources of the fund by this vast amount. when in fact it would have no control over the expenditure of the money. My hon. Friend the Member for Gravesend said that if we were going to make losses of fifty or a hundred millions, he would like to know it. As I explained the other day—I am afraid that my hon. Friend did not appreciate fully what I was saying on this point—you cannot really say that there is a profit or a loss until the fund is finally wound up. At the same time, seeing that some hon. Members prophesied freely that there must be a gigantic loss, and rather suggested that losses had already been incurred, I thought it desirable to reassure hon. Members who held those views or expressed those fears and to show that so far as we have gone, if we actually wound up the fund at this moment, no such losses would be found to have been incurred. An hon. Member put a specific question to me, whether, in certain hypothetical cases, there would not be a loss on the fund. I am not going to answer hypothetical questions of that kind. The answers would almost certainly be misleading because we cannot tell what the conditions would be. All I say to my hon. Friend is this. If when the end of the fund comes and everything is wound up, it is found that we have paid more for these exchange assets than we have got for them, then we shall have made a loss. In the contrary event, we shall have made a profit.
I turn to the argument which was put in such an entertaining manner by the hon. and gallant Member for Gainsborough. What is it that the House is to ask for in the matter of control? I must say that, as put by the hon. and gallant Member, his argument sounded very reasonable and I have every sympathy with the desire of the House, not to allow expenditure of the taxpayers' money pass out of its own control. But I ask him to consider whether it is possible, for the successful working of this particular kind of operation, that there should be published to the world from time to time, details of the transactions in which we have been engaged? The
purpose of the fund is to stop the operations of speculators. As a matter of fact, my own belief is that the knowledge that this fund exists for the purpose will, in itself, check the operations of speculators. But if we were to tell them exactly how we are using the fund, in what circumstances we did use it in a particular way, would not that be giving them the very information which they would most desire to have.

Mr. ALBERY: I do not think the right hon. Gentleman has understood us rightly as asking for all the details of the fund. All we are pressing for is a valuation statement which could be in quite a simple form and need not consist of more than three items.

Mr. CHAMBERLAIN: That is the hon. Member's own idea of what is being asked for but I do not think he is correct in saying that that is exactly what is desired by other people because it has been put forward in various ways. I have to consider all those ways—the hon. Member's way as well as the others and I say this. You have this fund audited by the Comptroller and Auditor-General. He has to certify that the fund has been operated in accordance with statute. That is all he is obliged to do at present. What more could he do? He could give a report. That is one suggestion. I think one hon. Member in the course of this Debate suggested he should give a report stating how the fund had been used. Let me point this out to the House. I think one hon. Member asked what would be the use to the speculators of knowing nine months afterwards what had been done. What use would it be to the House, nine months afterwards? How would the House have control? The only information the hon. Member now says is wanted, is whether on a particular date a profit or loss has been incurred. Of course, it could be stated whether on a particular date a profit or loss had been incurred, but it would always be misleading because the situation might be changed since that account had been made up.
There is no purpose in this inquiry whether a profit or loss has been made until the whole fund has come to an end. The dilemma in which I find myself is this: either you must give information to the House which will enable it to control the operation of the fund, in which
case you cannot confine it to the House, but must give it to everybody, including the speculators; or you must give the information so late that it is no use to the House. In these circumstances, if this fund is to be operated successfully, I see no alternative but to trust those in charge of it to operate it according to the general directions given to them by the House. I have stated the purpose of the fund, and I repeat that we are not attempting, and we could not if we tried, to affect the actual alteration of the permanent exchange value of the pound in regard to other currencies, but I believe

that the fund will be invaluable in the future, as it has been in the past year, in maintaining the pound against those fluctuations, that pumping up and down, which are so disturbing to traders and those who carry on commercial transactions. We believe that with the additional resources for which we are asking in this Bill we shall be able to do the same service in future years as we have been able to do in the past year.

Question put, "That the Bill be now read a Second time."

The House divided: Ayes, 238; Noes, 41.

Division No. 162.]
AYES.
[11.22 p.m.


Acland-Troyte, Lieut.-Colonel
Elmley, Viscount
Law, Richard K. (Hull, S.W.)


Adams, Samuel Vyvyan T. (Leeds, W.)
Emmott, Charles E. G. C.
Leckle, J. A.


Agnew, Lieut.-Com. P. G.
Emrys-Evans, P. V.
Leech, Dr. J. W.


Aitchison, Rt. Hon. Craigie M.
Entwistle, Cyril Fullard
Leighton, Major B. E. P.


Allen, Sir J. Sandeman (Liverp'l, W.)
Erskine-Bolst, Capt. C. C. (Blackpool)
Lennox-Boyd, A. T.


Allen, Lt.-Col. J. Sandeman (B'k'nh'd)
Essenhigh, Reginald Clare
Liddall, Walter S.


Apsley, Lord
Everard, w. Lindsay
Lindsay, Noel Ker


Aske, Sir Robert William
Flelden, Edward Brocklehurst
Little, Graham-, Sir Ernest


Atholl, Duchess of
Fleming, Edward Lascelles
Llewellin, Major John J.


Baldwin, Rt. Hon. Stanley
Foot, Dingle (Dundee)
Lloyd, Geoffrey


Banks, Sir Reginald Mitchell
Foot, Isaac (Cornwall, Bodmin)
Lockwood, John C. (Hackney, C.)


Barclay-Harvey, C. M.
Fremantle, Sir Francis
Lovat-Fraser, James Alexander


Barrie, Sir Charles Coupar
Ganzonl, Sir John
MacAndrew, Capt. J. O. (Ayr)


Beaumont, Hon. R.E.B. (Portsm'th,C.)
Gibson, Charles Granville
McCorquodale, M. S.


Bernays, Robert
Gillett, Sir George Masterman
Macdonald, Capt. P. D. (I. of W.)


Birchall, Major Sir John Dearman
Gilmour, Lt.-Col. Rt. Hon. Sir John
McEwen, Captain J. H. F.


Bird, Ernest Roy (Yorks., Skipton)
Gledhill, Gilbert
McKie, John Hamilton


Bowyer, Capt. Sir George E. W.
Gluckstein, Louis Halle
McLean, Major Sir Alan


Broadbent, Colonel John
Goff, Sir Park
McLean. Dr. W. H. (Tradeston)


Brocklebank, C. E. R.
Goodman, Colonel Albert W.
Magnay, Thomas


Brown, Col. D. C. (N'th'l'd, Hexham)
Graves, Marjorie
Mander, Geoffrey le M.


Brown, Ernest (Leith)
Grenfell, E. C. (City of London)
Margesson, Capt Rt. Hon. H. D. R.


Brown, Brig.-Gen.H.C.(Berks.,Newb'y)
Griffith, F. Kingsley (Middlesbro',W.)
Mayhew. Lieut.-Colonel John


Browne, Captain A. C.
Gunston, Captain D. W.
Mills, Major J. D. (New Forest)


Buchan-Hepburn, P. G. T.
Guy, J. C. Morrison
Mitchell, Harold P.(Br'tf'd & Chisw'k)


Burghley, Lord
Hacking, Rt. Hon. Douglas H.
Monsell, Rt. Hon. Sir B. Eyres


Burgin, Dr. Edward Leslie
Hales, Harold K.
Moore-Brabazon, Lieut.-Col. J. T. C.


Burnett, John George
Hanbury, Cecil
Morris, Owen Temple (Cardiff, E.)


Butler, Richard Austen
Hannon, Patrick Joseph Henry
Morris-Jones, Dr. J. H. (Denbigh)


Campbell, Edward Taswell (Bromley)
Harbord, Arthur
Morrison, William Shepherd


Campbell, Vice-Admiral G. (Burnley)
Hartington, Marquess of
Muirhead, Major A. J.


Caporn, Arthur Cecil
Hartland, George A.
Munro, Patrick


Carver, Major William H.
Harvey, George (Lambeth,Kenningt'n)
Nation, Brigadier-General J. J. H.


Castlereagh, viscount
Haslam, Henry (Horncastle)
Normand, Wilfrid Guild


Cazalet, Thelma (Islington, E.)
Haslam, Sir John (Bolton)
North, Captain Edward T.


Chamberlain, Rt. Hon. N. (Edgbaston)
Headlam, Lieut.-Col. Cuthbert M.
Nunn, William


Chapman, Col. R.(Houghton-le-Spring)
Herbert, Capt. S. (Abbey Division)
O'Donovan, Dr. William James


Choriton, Alan Ernest Leofric
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Oman, Sir Charles William C.


Clarke, Frank
Holdsworth, Herbert
O'Neill, Rt. Hon. Sir Hugh


Cochrane, Commander Hon. A. D.
Hope, Capt. Hon. A. O. J. (Aston)
Ormsby-Gore, Rt. Hon. William G. A.


Colville, Lieut.-Colonel J.
Hore-Bellsha, Leslie
Palmer, Francis Noel


Conant, R. J. E.
Hornby, Frank
Patrick, Colin M.


Cook, Thomas A.
Horsbrugh, Florence
Peake, Captain Osbert


Cooke, Douglas
Howard, Tom Forrest
Peat, Charles U.


Cooper, A. Dulf
Hudson, Capt. A. U. M. (Hackney, N.)
Penny, Sir George


Courtauld, Major John Sewell
Hudson, Robert Spear (Southport)
Percy, Lord Eustace


Craven-Ellis, William
Hunter, Dr. Joseph (Dumfries)
Perkins, Waiter R. D.


Crooke, J. Smedley
Hunter, Capt. M. J. (Brigg)
Petherick, M.


Crookshank, Col. C. de Windt (Bootle)
James, Wing-Com. A. W. H.
Pickering, Ernest H.


Cruddas, Lieut-Colonel Bernard
Janner, Barnett
Pickford, Hon. Mary Ada


Davies, Maj. Geo. F.(Somerset, Yeovil)
Jesson, Major Thomas E.
Potter, John


Donner, P. W.
Jones, Sir G. W. H. (Stoke New'gton)
Power, Sir John Cecil


Drewe, Cedric
Jones, Lewie (Swansea, West)
Procter, Major Henry Adam


Dugdale, Captain Thomas Lionel
Ker, J. Campbell
Raikes, Henry V. A. M.


Duncan, James A. L. (Kensington, N.)
Kerr, Lieut.-Col. Charles (Montrose)
Ramsay, Alexander (W. Bromwich)


Eastwood, John Francis
Kerr, Hamilton W.
Ramsay, Capt. A. H. M. (Midlothian)


Edge, Sir William
Kimball, Lawrence
Ramsay, T. B. W. (Western Isles)


Ellis, Sir R. Geoffrey
Lambert, Rt. Hon. George
Reid, William Allan (Derby)


Elliston, Captain George Sampson
Law, Sir Alfred
Remer, John R.


Rentoul, Sir Gervais S.
Skelton, Archibald Noel
Thompson, Luke


Renwick, Major Gustav A.
Slater, John
Titchfield, Major the Marquess of


Robinson, John Roland
Smiles, Lieut.-Col. Sir Walter D.
Todd, Capt. A. J. K. (B'wick-on-T.)


Ropner, Colonel L.
Smith, R. W. (Ab'rd'n & Kinc'dlne.C.)
Touche, Gordon Cosmo


Rosbotham, Sir Samuel
Somervell, Donald Bradley
Tryon, Rt. Hon. George Clement


Ross, Ronald D.
Southby, Commander Archibald R. J.
Wallace, Captain D. E. (Hornsey)


Ross Taylor, Walter (Woodbridge)
Spears, Brigadier-General Edward L.
Ward, Irene Mary Bewick (Wallsend)


Rothschild, James A. de
Spencer, Captain Richard A.
Warrender, Sir Victor A. G.


Ruggles-Brise, Colonel E. A.
Spens, William Patrick
Waterhouse, Captain Charles


Russell, Alexander West (Tynemouth)
Stanley, Hon. O. F. G. (Westmorland)
Wedderburn, Henry James Scrymgeour


Rutherford, John (Edmonton)
Stevenson, James
Whiteside, Borras Noel H.


Rutherford, Sir John Hugo (Liverp'l)
Stewart, J. H. (Fife, E.)
Williams, Herbert G. (Croydon, S.)


Salmon, Sir Isidore
Storey, Samuel
Windsor-Clive, Lieut.-Colonel George


Salt, Edward W.
Strauss, Edward A.
Winterton, Rt. Hon. Earl


Samuel, Sir Arthur Michael (F'nham)
Strickland, Captain W. F.
Wise, Alfred R.


Samuel, Samuel (W'dsworth, Putney)
Sueter, Rear-Admiral Murray F.
Womersley, Walter James


Sandeman, Sir A. N. Stewart
Sugden, Sir Wilfrid Hart
Wood, Sir Murdoch McKenzie (Banff)


Sanderson, Sir Frank Barnard
Summersby, Charles H.
Worthington, Dr. John V.


Scone, Lord
Tate, Mavis Constance



Shaw, Helen B. (Lanark, Bothwell)
Templeton, William P.
TELLERS FOR THE AYES.—


Shepperson, Sir Ernest W.
Thomas, James P. L. (Hereford)
Lieut.-Colonel Sir A. Lambert Ward and Mr. Blindell.


NOES.


Attlee, Clement Richard
George, Megan A. Lloyd (Anglesea)
Maclean, Neil (Glasgow, Govan)


Banfield, John William
Greenwood, Rt. Hon. Arthur
Mainwaring, William Henry


Batey, Joseph
Grenfell, David Rees (Glamorgan)
Mason, David M. (Edinburgh, E.)


Bevan, Aneurin (Ebbw Vale)
Hall, George H. (Merthyr Tydvil)
Maxton, James


Cape, Thomas
Hirst, George Henry
Milner, Major James


Cocks, Frederick Seymour
Jenkins, Sir William
Parkinson, John Allen


Cripps, Sir Stafford
Jones, Henry Haydn (Merioneth)
Price, Gabriel


Daggar, George
Jones, Morgan (Caerphilly)
Thorne, William James


Davies, David L. (Pontypridd)
Kirkwood, David
Tinker, John Joseph


Davies, Rhys John (Westhoughton)
Lansbury, Rt. Hon. George
Williams, Edward John (Ogmore)


Dobbie, William
Lawson, John James
Williams, Thomas (York., Don Valley)


Edwards, Charles
Leonard, William



Evans, David Owen (Cardigan)
Llewellyn-Jones, Frederick
TELLERS FOR THE NOES.—


Evans, Capt. Ernest (Welsh Univ.)
Lunn, William
Mr. John and Mr. D. Graham.


George, Major G. Lloyd (Pembroke)
McEntee, Valentine L.



Question put, and agreed to.

Bill accordingly read a Second time, and committed to a Committee of the Whole House for To-morrow.

INDIAN CONSTITUTIONAL REFORM.

11.31 p.m.

The SECRETARY of STATE for INDIA (Sir Samuel Hoare): I beg to move,
That the Select Committee appointed to join with a Committee of the House of Lords on Indian Constitutional Reform have power to report from day to day or otherwise the Minutes of Evidence taken before them, and such other records as they may think fit.
I think that I can commend this Resolution to the House in a very few sentences. It is not a Government manoeuvre; it is not any sort of sharp practice, hidden from the public, and I move the Resolution, not so much as Secretary of State for India, as a Member of the Joint Select Committee. The Joint Select Committee have discussed the question that is in the Resolution, and they have come unanimously to certain conclusions. As a result, I was instructed by the committee to move this
Resolution on behalf of the committee in this House, while the chairman of the committee has taken charge of a similar Resolution in the other place. The object of the Resolution is as follows. As in the ordinary procedure of Joint Select Committees, the alternative is between what is known as a "close" committee and an "open" committee. Normally, a close committee means that no communications are made to the Press during the sittings of the committee, and no representatives of the public or of the Press are admitted into the committee. The proceedings of the committee are secret. The other alternative, the open committee, is that, from the start to the finish of the committee's proceedings, all the meetings are open to the public and the Press. The members of the Joint Select Committee discussed whether either of these kinds of procedure was exactly applicable to the work of the Joint Select Committee, and we came to the conclusion that, for obvious reasons, they were not. In the first place, we were not at all prepared to adopt the alternative of a close committee, in which the public and the Press would know nothing about the proceedings. I think that I should
be right in saying that no member of the committee shirked in any way publicity, or was at all reluctant to see the proceedings of the committee followed by the public and the Press outside. We fully realised that we were discussing questions not only of the greatest importance, but of the greatest interest to Members of this House and the public generally, and we therefore considered that it would have been open to many kinds of objection if we had adopted the alternative of a closed committee, and had allowed the public and Members of this House to know little or nothing about what was happening.
When, however, we came to the alternative of the open Committee, that is to say, the Committee whose proceedings were open to the public and to the Press, there again an obvious difficulty presented itself. The Joint Select Committee is composed of 32 Members of both Houses; it is a very large Committee in itself; and in addition, in accordance with the instructions of this House and of another place, it has invited a number of representative Indians to confer with it. No fewer than 28 Indian gentlemen representing various Indian points of view have been invited to confer with the Committee in pursuance of those instructions, and the result is that the body now amounts to no fewer than 60 individuals. When we came to consider the question whether, with a body as large as that, we could have in the same room representatives of the Press—and that does not mean representatives of the British Press only, but representatives of the Indian Press as well—and representatives of the public, we came to the conclusion that it was physically impossible. It would have meant that our deliberations would have ceased to be the kind of discussions that we should desire, and would merely have developed into a series of public meetings, which we should have had to hold, so we were informed, in the biggest of the chambers in another place—a chamber so big that we should have had to have microphones for making ourselves heard; and anything in the nature of an effective discussion of the whole series of complicated constitutional details that we have to discuss would have been impossible.
We came to the conclusion, therefore, that any kind of sittings of that kind were out of the question. Then we found ourselves faced with a difficulty of Parliamentary procedure. We should have liked to decide at once that although representatives of the Press, for these physical reasons, could not be present, the Committee should have had a shorthand transcript taken of the evidence, and should have transmitted that transcript to the Press every day. But we were informed that that course was impossible without a Resolution of the House. It would be a breach of privilege to issue to the Press transcripts of evidence, precis of discussions, or reports of any kind until they had been first issued to this House and to another place; and we have therefore come to the House to ask for this power. In practice it will mean that a shorthand writer will take down the evidence day by day during the Committee's discussions, and that evidence will at once be placed in the Vote Office here in this House, and in a similar place in the other House, and Members, therefore, will be able from day to day to get a full account of all the formal evidence that is given to the Committee. Similarly we are asking authority to issue to the Press such other reports of our proceedings as the Committee may decide. I hope I have now said enough to show the House that this procedure is very necessary in the circumstances, that the Press and the public will not be deprived of full reports of the evidence as it is given and that it is much the wisest course for the Committee to adopt.

11.42 p.m

Mr. ATTLEE: As a member of the Joint Select Committee and on behalf of Members on these benches, I entirely agree with what the right hon. Gentleman has said. The Joint Select Committee gave considerable attention to this matter and, I think, came to the unanimous conclusion that this is the best way in which we can perform our duty and serve this House and the public.

Sir JOSEPH NALL: The Motion is agreed by the Committee, as my right hon. Friend said but, perhaps inadvertently, he made one slip in his statement when he said the evidence would be
laid day by day. The terms of the Motion say "day by day or otherwise as the Committee may decide." It does not follow that it will be day by day.

11.43 p.m.

Duchess of ATHOLL: I should like, to ask the right hon. Gentleman if this means that no evidence is to be heard in camera. The hon. Gentleman opposite told us that this is the procedure that was adopted by the Statutory Commission.

Mr. ATTLEE: No, I only referred to the Joint Select Committee.

Duchess of ATHOLL: The point I was going to make is that the hon. Member for Finchley (Mr. Cadogan), who was a member of the Statutory Commission, in a book which he has recently published lays considerable stress on the fact that evidence given by Indian witnesses in the presence of members of the Consultative Committee too often found its way into the Press. I think it is clear from statements of that kind that it may be very difficult for the Joint Select Committee to get evidence from Indian witnesses unless they are heard in camera. I should be glad if the right hon. Gentleman would assure me that these facts will be taken into consideration that the Committee will be empowered to hear some evidence in camera.

Sir S. HOARE: I can assure the Noble Lady that the Committee retains full rights of that kind. The hon. Member for Finchley (Mr. Cadogan) is a party to the decision and fully approves of the course proposed.

Ordered,
That the Select Committee appointed to join with a Committee of the House of Lords on Indian Constitutional Reform have power to report from day to day or otherwise the Minutes of Evidence taken before them, and such other records as they may think fit.

Ordered,
That the Committee have power, if the House be not sitting, to send such Minutes and records to the Clerk of the House, who shall thereupon give directions for the printing and circulation thereof and shall lay the same upon the Table of the House at its next meeting."—[Sir S. Hoary.]

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Thirteen Minutes before Twelve o'Clock.